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An additional loan product for jeonse loans that can be repaid in installments will be launched next month.
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.
SGI Seoul Guarantee still operates the amortized loan guarantee, but there is a difference in that new products can be changed in a temporary repayment method if necessary.
When it becomes difficult for the borrower to pay off the principal by sharing the principal due to an unexpected decrease in income, a function has been added to allow the borrower to pay off the loan at maturity without worrying about arrears.
Earlier this year, the Financial Services Commission announced its work plan to activate the amortization loans.
An official from the financial authorities said, “Private guarantee institutions are also pursuing a plan to provide installment payment jeonse guarantees,” and said, “In May, you will be able to subscribe to the product.”
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.
If you are a borrower who needs to save a lot of money in preparation for a home arrangement or an increase in cheonsei, you can also seek tax-free and income deduction benefits through amortization of jeonse loans.
This is because 14% tax is added to interest income when saving money by pouring savings, but if you pay off the loan with that money instead of putting in deposits or savings, it is an advantage because 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).
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 220 million won.
Until the 26th of last month, the cumulative number of applications was 502, about 63.5 billion won.
In the future, if the supply of amortization pre-generation loans expands and the market interest rate rises separately, it is predicted that the demand for amortization may increase.
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.
Meanwhile, the Financial Services Commission is also considering expanding programs to support loans for cheonsei and monthly rents for youth under the age of 34.
The per-person guarantee limit is raised from the current’deposit 70 million won, monthly rent less than 500,000 won’ and lowered the guarantee rate from 0.05% to 0.02%. The total supply limit is abolished.
Detailed plans related to youth jeon and monthly rent will be included in the’Household Debt Management Plan’ to be announced in the middle of this month.
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