The Financial Services Commission and the Credit Counseling and Recovery Service (CCRS) announced that a new low-interest loan support program (“New Leap Loan”) in the amount of KRW550 billion will be made available from November 14 to assist debtors already undergoing a restructuring process with 7-year or more overdue debts.
The FSC held a meeting with the CCRS, six major banks, and Seoul Guarantee Insurance (SGI) on November 14 where the participating banks signed an MOU with the CCRS and SGI detailing their commitment to the “New Leap Fund” program. An initial announcement for this program was previously made on October 1 with the introduction of a new long-term debt restructuring program (“New Leap Fund”).
The newly available low-interest loan support program (“New Leap Loan”) is intended to assist those who fall outside the coverage of the “New Leap Fund” program. More specifically, “New Leap Loan” will provide low-interest loans to those who have already entered into a debt restructuring process with 7-year or more overdue debts and have been making debt payments accordingly for at least six months. The maximum loan support available per individual will be KRW15 million at a lending rate of 3.0 percent to 4.0 percent annually. The total amount of support available for the program is KRW550 billion, and the program will be operated on a temporary basis for three years.
Application is available from microfinance support centers across the country and on the website of the CCRS. Depending on individual circumstances, applicants may also be eligible to receive employment counseling and welfare assistance.
At the same time, the CCRS will also make available a special debt restructuring support program for debtors with 5-year or more overdue debts who also fall outside the coverage of “New Leap Fund.” This will offer the same level of debt restructuring support made available by “New Leap Fund,” such as principal reduction of 30 percent to 80 percent, installment payments for maximum 10 years, etc.
Application for special debt restructuring support program is also available from today at microfinance support centers nationwide and on the website of the CCRS.
* Please refer to the attached PDF for details.