From next month, it will be possible to pay off in installments of 500 million jeonse loans

A chartered loan product that can be repaid in amortization is expected to be released next month. The main point is that the guarantee limit is raised to 500 million won.

According to the financial sector on the 4th, SGI Seoul Guarantee has decided to provide a jeonse guarantee with a limit of 500 million won (300 million won for inhabitants) that can be repaid in installments, and is discussing the timing of product launch with commercial banks. It is expected to be available in May as early as possible.

Earlier this year, the Financial Services Commission announced its work plan to activate the amortization loans.

Considering these advantages, the Financial Services Commission and Korea Housing Finance Corporation launched an amortization jeonse guarantee at the end of October last year, but there were limitations, such as that the guarantee limit was only 222 million won.

Until the 26th of last month, the cumulative number of applications was 502, about 63.5 billion won.

With the launch of private guarantee products in the future, it is possible to repay in installments even for large-sized jeonse loans. Separately, there is a prospect that demand for amortized repayment may increase if the market interest rate rises.

In general, a mortgage loan pays off principal and interest together, but a jeonse loan pays only interest and pays off the principal at maturity. The loan principal does not decrease, so you have to pay the same interest all the time. On the other hand, if part or all of the principal is repaid in installments, the loan principal decreases as time passes, so the interest burden decreases.

In addition, through amortization of cheonsei loans, tax-free and income deduction benefits can also be sought.

When saving money by pouring savings, 14% tax is added to the interest income, but if you pay off the loan with that money instead of putting in a savings or savings, you do not have to pay taxes. In addition, since the money spent on repaying the principal and interest is recognized as expenditure at the year-end settlement, you can receive an income deduction for 40% of the amount paid for principal and interest (up to 7.5 million won in principal).

The financial authorities have announced an administrative guidance that provides benefits to lower contribution fees to the Housing Finance Credit Guarantee Fund to banks that handle a lot of amortization charter loans.