Business · Companies · 1 hr ago
Five South Korean Banks Earned Interest on Withdrawn Loans
South Korea allows borrowers to withdraw a loan contract within 14 days.
From 2021 to September this year, the country’s five largest commercial banks issued 6.78 million new personal credit loans, and about 180,000 were withdrawn.
Interest on those withdrawn loans totalled about 1.8 billion won over the five-year period.
Borrowers can still owe interest for the time they had the money, even if they cancel the contract.
But some withdrawn loans carried rates of up to 12% a year, while the average rate on withdrawn loans at the five banks was 5.06% in September.
The interest collected each year rose from 100 million won in 2021 to about 423 million won in 2025, drawing attention to the cost of cancelling a loan.
The issue raises concerns about consumer protection, and the effects of higher rates are being examined.
South Korea’s five major commercial banks earned about 1.8 billion won in interest on loans that customers withdrew over the past five years.
From 2021 through September 2026, the banks issued 6.78 million new personal credit loans, and about 180,000 of those contracts were withdrawn.
The withdrawn loans totalled about 3.744 trillion won.
Customers can withdraw a loan contract within 14 days, but interest may still be charged for the time they borrowed the money.
The average rate on withdrawn loans rose from about 4% in 2021 to 5.06% in September 2026, while some loan products carried rates of up to 12%.
- Who
- Five major South Korean banks: KB Kookmin, Shinhan, Hana, Woori and NH NongHyup.
- What
- They earned about 1.8 billion won in interest on loans whose contracts customers withdrew.
- When
- From 2021 through September 2026.
- Where
- South Korea.
- Why
- Interest was charged for the period customers had borrowed the money, even if they later withdrew their contracts.
This story does not have two clearly opposing sides.
The average rate on withdrawn loans was about 4%, and the banks earned 100 million won in interest that year.
Interest from withdrawn loans reached 300 million won.
Interest from withdrawn loans reached 415 million won.
Interest from withdrawn loans reached 423.4 million won.
The average rate on withdrawn loans was 5.06%, and interest for the year to date was 322.5 million won.
- Banks
- KB Kookmin, Shinhan, Hana, Woori and NH NongHyup
- New credit loans
- 6.78 million, worth about 183 trillion won, from 2021 through September 2026
- Withdrawn contracts
- About 180,000, or roughly 3% of new loans
- Withdrawn loan value
- About 3.744 trillion won
- Interest earned
- About 1.8 billion won over the past five years
- Highest stated rate
- Up to 12% a year for some products