Woori Bank Caps New Personal Credit Loan Rates at 7% Annually

Woori Bank said March 22 it will expand its interest-rate cap to cover new personal credit loans, limiting rates to no more than 7% a year starting March 23.

The bank also announced a new product, the “Woori WON Dream Living Expense Loan,” aimed at easing financial burdens for mid- and low-credit borrowers.

Woori said the measures are part of Woori Financial Group’s “Future Shared Growth Project” to broaden inclusive finance, as economic slowing and rising living costs have increased pressure on vulnerable households.

Until now, Woori has applied the 7% cap to customers extending or renewing personal credit loans. The change expands the cap to new loans.

Under the program, consumers who have maintained accounts with Woori for at least one year — including deposits and savings, credit cards and subscription savings — will have the rate on a new personal credit loan capped at 7% a year for up to one year, for up to one time.

Woori expects more than 10,000 loans to receive the capped-rate benefit.

The Woori WON Dream Living Expense Loan targets wage earners, nonwage workers and homemakers with annual income of 25 million won or less. The bank said it will use alternative credit scoring based on a range of data — including financial, telecom and small-payment information — to expand eligibility to credit bureau grade 8 and improve access to financing.

The product is designed to allow applications from customers with limited documented income. Borrowers can take out up to 10 million won. Rates start in the high 4% range annually, with the maximum capped at 7% a year.

Woori said it adopted an installment repayment structure of up to 10 years, including a three-year grace period, to reduce repayment burdens. Preferential rates will be offered to groups covered by inclusive finance programs, including young people, older adults, people with disabilities and recipients of basic living assistance.

“This expansion of the interest-rate cap and the launch of the living-expense loan are inclusive finance policies to improve access to financial services for vulnerable groups and ease interest burdens,” said Lee Jeong-ho, deputy head of Woori Bank’s retail loan product team. “Through Woori Financial Group’s ‘Future Shared Growth Project,’ we will expand support so finance can serve as a social safety net,” he said.