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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] SEOUL, South Korea – The Financial Services Commission (FSC) announced on August 11 that it will implement a special “credit amnesty” program for individuals and sole proprietors who fell behind on loan payments during the COVID-19 pandemic and the high interest rate period, but fully repay debts of KRW 50 million (approx. USD 37,000) or less by the end of 2024.
The initiative, set to begin on September 30, will remove delinquency records from credit databases, benefiting approximately 3.24 million borrowers. Eligible participants include those who incurred payment delinquencies between January 2020 and August 31, 2024, and settle their debts in full by December 31, 2024.
According to the FSC, about 2.72 million people have already completed repayment, while the remaining 520,000 could still qualify if they meet the deadline.
Under normal circumstances, delinquency records remain in the Korea Credit Information Services database for one year and in credit bureau (CB) records for up to five years, even after repayment. The FSC said this one-time measure aims to help “responsible borrowers” restore their credit scores, thereby removing barriers to new loans, improving lending terms, and lowering interest rates.
The policy is part of broader efforts to ease the financial burden on households and small business owners hit hardest by the pandemic and the economic slowdown.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
