Government’s Support of Regaining Credit

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Regarding regaining credit, since 2008, government has helped 5.39 hundred thousand people to recover their credit. For those who has repaid the loan sincerely, has got the funds for living with low interest (4%). There have been certain achievements but there should be more help with finance and other efforts to prevent deterioration of credit rating.

To prevent this, finance authority would help them in 2 ways.

  (Regaining credit)

l  Expand the funds for those who have been sincerely repaid the loan with low-interest and reduce the cost related to regaining credit. If debtor repays the loan sincerely for more than 1 year, Credit Counseling & Recovery Service would support finance with low interest(4%).

*(2010) 70 billion → (2011) 90 billion → (2012) 100 billion

 

l  If debtor cannot get the support with low interest, finance authority would reinforce the cooperation to make debtors get the Sunshine Loan.

l  Expand the scope of applicants who could apply credit repair and readjustment for their credit at no cost. (cost of readjustment for emergency would be exempt for once and cost of apply for vulnerable class such as army would be free)

 

(Support of getting job for debtors)

l  It would be banned for using someone’s credit information as criteria in employing.

l  If someone’s loan is overdue, grace period (2 years) is given to debtors after graduation.

l  For university students, support for credit repair is allowed and delay the repayment period up to 2 years simultaneously with start of credit repairing.

As mentioned above, financial authority is trying to help university students by alleviating the burden of debt. Status quo, if student’s loan is more than 6 months overdue, that overdue information is recorded in Bankers Association.But there are 2 problems.

  1. If the students apply for the loan and cannot repay the debt for his/her family reasons, there is a difficulty to get a job.
  2. If there is a difficulty to get a job due to the overdue record, It makes much more hard to repay the loan

Financial authority suggests some ways to deal with these problems.

  1. Promote the way that delay specific period of registration in Banker Association even if it’s the normal school expenses which are provided by Korea Student Aid Foundation(KOSAF).
  2. Concrete period, procedures are going to be discussed with Bankers Association and KOSAF.

 

  City of Seoul has already notified that they will support 4.1 billion-won up to 30 thousand people who got the loan from KOSAF. According to Seoul city, the purpose of doing this support is that those students who should pay for the interest might have the potential to be the delinquent borrower in the future. The applicants could be university students whose household income is less than 52 million-won. But, if there are more than 3 children, regardless of household income, Seoul city offers the 50% of interests. There would be no Separate application procedures including check for requirements. Only if the student who graduated from high school which has no advance information is in college outside the Seoul, there would be separate procedure. Also, they support not only students whose address is in Seoul but also students who are going to university in Seoul but their address is not in Seoul.  Related inquiry could be reached at 02-2171-2995~6.

 

Ju Hyun Han (blackhall4@naver.com)

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