Government Caps Interest Rate
The Financial Supervisory Commission will cap interest rates for overdue loan payments at 20 percent to 70 percent above stated rates beginning in July, the Finance Ministry said Wednesday. The ceilings for the past-due loan rates will vary depending on whether the business is a bank, credit card company or mutual saving bank, the ministry added.Credit card companies typically charge 14 percent in annual interest for on-time payments of goods purchased over time, but around 29 percent for overdue payments. Commercial banks usually lend to individuals at about a 10 percent rate, but once the loans slip into default it doubles to 18-20 percent.
with the Korea JoongAng Daily
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