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By Yoon Ja-young
If a person gets promoted and receives a higher income or accumulates more assets, they have a legal right to demand banks or other lenders to slash interest rates levied on their borrowings. However, seven out of 10 requests to lower interest rates are rejected, according to the latest data.
Data Rep. Yun Chang-hyun of the ruling People Power Party obtained from the Financial Supervisory Service (FSS) showed there were 882,047 requests filed by customers to banks, including regional banks and online-only banks, to have their loan rates lowered. However, only 26.6 percent of such requests were approved by the lenders.
Following a revision of related laws in June 2019, customers have the right to demand banks to slash loan rates if their credit conditions have improved, such as increases in assets or income. For example, a customer who did not have a job at the time he or she obtained a loan may have been hired later, promoted to a higher position, or switched to a better paying job. Corporate customers may also request lower loan rates if the company's financial structure has improved.
However, the chances of such requests being accepted are becoming slimmer each year.
While 32.8 percent of the requests were approved in 2019, it fell to 28.2 percent in 2020 and to 26.6 percent in 2021. By bank, NongHyup Bank accepted 95.6 percent of such requests, followed by Woori at 63 percent.
To promote a customer's right to demand lower rates, the financial regulator started obligating lenders to disclose twice a year their data on requests to lower loan interest rates and the actual approval numbers. They should also explain to customers why their requests were rejected.
