With the recent increase in housing market transactions leading to a surge in household loans, the financial sector is moving to tighten loan regulations.
According to industry sources on the 21st, Shinhan Bank has decided, after internal review, to temporarily suspend conditional Jeonse loans starting on the 26th. This loan product was offered only under specific conditions, such as the transfer of ownership by the landlord or the cancellation of prior claims. The decision was made due to growing concerns about speculative loans in the real estate market.
A representative from Shinhan Bank explained, "We have decided to preemptively suspend conditional Jeonse loans to manage household debt, as there have been concerns that these loans are being exploited for speculative purposes, such as gap investment."
In addition, Shinhan Bank plans to raise interest rates on housing-related loans starting on the 23rd. Mortgage loan rates are expected to increase by 0.20% to as much as 0.40 percentage points (p), while Jeonse loan rates will rise by 0.10% to 0.30 percentage points, depending on the guarantor.
Furthermore, Shinhan Bank will also suspend its Plus Mortgage Loan (MCI/MCG) products starting on the same day. These products are linked to mortgage insurance, and without this insurance, the amount of the loan that can be borrowed is limited, effectively reducing the loan limit.
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Shinhan Bank Decides to Suspend Conditional Jeonse Loans Due to Concerns Over Gap Investment
With the recent increase in housing market transactions leading to a surge in household loans, the financial sector is moving to tighten loan regulations.Accor
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