As interest rates on loans rose, savings banks' medium-interest loans in the first quarter declined significantly, reportedly reducing loans to middle and low creditors.

According to the consumer portal of the Central Association of Savings Banks today (1th), in the first quarter of this year, borrowers with a credit score of 14~1 applied an average interest rate of 601.700% when using private medium-interest loans.

This is an increase of 15.47 percentage points from 1.14% in the first quarter of last year.

Private medium-rate loans are loans of credit provided by a financial company to borrowers in the bottom 10% of credit at interest rates below a certain level.

In the first half of this year, the Monetary Authority set a cap of 1.37% for private medium-rate loans to savings banks, and if this target is achieved, the authorities will benefit from deregulation, etc.

However, as interest rates on loans have risen significantly, the size of medium-interest loans has also decreased significantly.

In the first quarter of last year, the amount of private medium-interest credit loans handled by savings banks was 50.17 trillion won, down more than 5% from the same period last year.

The number of savings banks that actually issued loans also decreased from 1 to 1, respectively.

The reason behind this slump in medium-interest loans is rising interest rates and prudential management.

The financing rate of the sunshine loan, the flagship policy financial product handled by savings banks, has also risen.

According to the consumer portal of the Central Association of Savings Banks, the procurement rate of the Sunshine loan for handling in the first quarter was 6.685%, up 40.33 percentage points year-on-year.

(Photo=Yonhap News)