Obtaining a loan with favorable terms can be challenging if you have a low credit score or limited income. To address this, governments offer specific financial products like "Sunshine Loans" and other subsidized loan schemes aimed at low-income and low-credit individuals. However, there are instances where people improve their credit score yet still find it difficult to secure a loan from Tier-1 banks. Enter "Sunshine Loan Bank," a government-initiated loan product specifically designed to help such individuals.
What is Sunshine Loan Bank?
Sunshine Loan Bank is a government-backed loan scheme intended to offer low-interest loans to people who meet specific criteria. Unlike conventional Sunshine Loans, which are mostly available through savings banks, Sunshine Loan Bank allows you to secure loans from Tier-1 banks.
Who is Eligible?
- Individuals who have used government-subsidized financial products and have fully repaid them within the last 3 years (previously 1 year until December 31, 2022).
- Those who have used subsidized loan products for more than 6 months (previously 1 year).
- Low-income or low-credit individuals who have shown improvement in their debt or credit situation.
Loan Amount
You can borrow between 5 million to 25 million KRW. The specific amount depends on the outcome of your credit evaluation.
Loan Tenure
You can opt for either a 3-year or a 5-year loan term:
- A 3-year loan comes with a 1-year grace period followed by a 2-year principal and interest repayment period.
- A 5-year loan includes a 1-year grace period plus a 4-year repayment period.
There are no prepayment penalties.
Interest Rates
The interest rates vary between 2.9% to 6% annually (subject to change), excluding a loan guarantee fee of an additional 2%. However, there are specific conditions under which you can receive discounts on this guarantee fee, such as being a young low-income individual or having completed a financial education consultation.
How to Apply?
You can either visit one of the 13 affiliated banks in person or apply through their respective mobile applications. Some third-party apps like Toss also allow you to check your eligibility without going to a branch.
By leveraging the Sunshine Loan Bank, low-credit and low-income individuals have a new avenue to improve their financial situation and transition into mainstream banking.