SEOUL — The Financial Supervisory Service (FSS) of South Korea announced plans on Monday to revise regulations to eliminate early redemption charges on loans, in a move to alleviate the growing burden of household debt. This amendment will restrict lenders to charging only the actual fees and costs associated with processing or concluding a loan agreement.
According to Yonhap News Agency, while current laws already prohibit early redemption charges, exceptions have been made for loans repaid within three years of issuance. The forthcoming regulation aims to permit lenders to recover only their financial losses due to changes in fund management and the genuine administrative costs related to the loan, such as marketing expenses, thereby banning any additional fees as an unfair business practice.
The revised rules, expected to be implemented six months following a mandatory 40-day legislative preannouncement period ending on April 15, might introduce a discrepancy in early redemption fees for in-person versus online loans, potentially due to variations in marketing costs. Furthermore, the FSS indicated that borrowers transitioning to a different loan with the same lender could be exempt from additional charges.
The government anticipates that this regulatory update will significantly reduce the financial burden on consumers seeking early loan settlements to more manageable levels.
SEOUL — South Korean stocks witnessed a significant upturn late Monday morning, driven by sustained foreign investment for the seventh consecutive day and notable increases in the technology and finance sectors. The Korea Composite Stock Price Index (KOSPI) saw an increase of 31.65 points, reaching 2,674.01 by 11:20 a.m.According to Yonhap News Agency, Foreign investors continued their streak as net buyers, contributing to the bullish momentum in the market. Leading the charge, tech giant Samsung Electronics experienced a 1.09 percent rise, while semiconductor manufacturer SK hynix saw a substantial 4.67 percent jump. The finance sector also showcased strong performance, with KB Financial and Samsung Life Insurance recording gains of 5.98 percent and 5.68 percent, respectively.
Additionally, chemical company LG Chem and top oil refiner SK Innovation reported increases of 4.08 percent and 0.94 percent, underscoring the broad-based gains across multiple industry segments. Meanwhile, the South Korean won strengthened against the U.S. dollar, trading at 1,330.6 won, marking a 0.9 won improvement from the previous session.