Hana Card is introducing a cap on credit loan and credit interest rates at 12%, the first of its kind in the secondary financial sector, to support small business owners and self-employed individuals facing increased financing burdens due to prolonged high interest rates and sluggish domestic demand. This new rate is 8 percentage points lower than the legal maximum of 20%.
Starting in July and running through the end of December, Hana Card will implement the 'interest rate cap' for new credit loans and credit lines.
The program targets small business owners and self-employed individuals with annual sales of 300 million won or less. Currently, the average interest rate for credit loans in the card industry ranges from 8.32% to 19.00%, while credit loans from specialized credit finance companies range from 9.43% to 19.90%.
By limiting the maximum interest rate to 12%, Hana Card expects that borrowers in the mid to low credit score range will benefit from a reduction of more than 7 percentage points in interest rates.
This interest rate cap is seen as a voluntary measure by a private financial institution to apply a lower rate than the legal maximum, reflecting a commitment to cooperative finance. Industry experts anticipate that the reduced interest burden will lead to increased working capital and reinvestment, thereby revitalizing local economies.
Sung Young-soo, CEO of Hana Card, stated, "This interest rate cap reflects our commitment to grow alongside small business owners and self-employed individuals in a challenging business environment. We will ensure that financial benefits translate into tangible advantages for all financial consumers."
* This article has been translated by AI.
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