Internet bank’s first 100% non-face-to-face real estate mortgage loan for small business owners and other individual business owners

 

[GLOBAL ECONOMIC TIMES]  K Bank (CEO Woohyung Choi) received the grand prize in the service category (Korea Economic Daily President’s Award) at the ‘Hankyeong Fintech Awards’ for ‘President’s Real Estate Mortgage Loan’, the first internet-only bank to provide a real estate mortgage loan for individual business owners.

This product, launched by K Bank last August, is the first 100% non-face-to-face real estate mortgage loan by an internet bank for individual business owners such as small business owners. The loan limit is 500 million won per case for new loans and 1 billion won per case when replacing existing working capital loans. You can get a loan with just a business registration certificate. The entire process from application to implementation is handled non-face-to-face.

There are two types of loans: fixed and variable interest rates. The lowest interest rate for both types was 3.58% per annum as of the 2nd. Considering that the average interest rate for personal business physical collateral loans newly granted by the five major commercial banks to borrowers with credit ratings 1 to 3 in the second quarter of this year is 4.95% per annum, it is considered an innovative product that provides both interest rates and convenience. 

To repay the loan, you can choose between lump sum repayment at maturity and repayment of the principal in equal installments. The maturity of the lump sum repayment type can be selected from 1, 2, or 3 years. The maturity period for equal principal installment repayment is 5 years. It is evaluated that with the launch of the boss mortgage loan, individual business owners who previously received a real estate mortgage loan can lower the interest rate and enjoy the benefit of interest savings by switching loans. A K-Bank official said, “We expect that self-employed small business owners who are having difficulty raising operating funds due to the worsening economy will be able to ease their financial burden through the owner’s real estate mortgage loan.”

To launch this product, K Bank developed its own artificial intelligence (AI) system that compares and analyzes the industry information contained in the business registration certificate with sales report data. This system checks whether the sales information matches the industry reported by the customer.

K Bank is continuously upgrading its real estate mortgage loans. At the time of launch, only senior loans were available, so in order to receive a loan, there had to be no mortgage or lease agreement from another financial company on the real estate to be set as collateral. 

Accordingly, K Bank expanded the scope of the president's real estate mortgage loan to subordinated loans last month. We plan to expand the collateral available only for apartments to include officetels and shopping malls. Since launching the first guaranteed loan as an internet bank in 2022, we have been expanding our products for individual business owners by launching credit loans and the boss's bank account, as well as the boss' real estate mortgage loan. K Bank President Choi Woo-hyung emphasized, “We will continue our efforts to innovate corporate finance by continuously upgrading financial products for individual business owners.”