Kakaobank launched a service that allows self-employed individuals to consolidate their existing loans into a single refinancing loan. A key feature is that it can refinance and consolidate up to 5 loans from other financial institutions, including unsecured credit loans, guarantee-backed loans and real estate secured loans.

Kakaobank said on Tuesday it introduced its "self-employed real estate secured loan refinancing" service.

Eligible loans for refinancing are self-employed unsecured credit loans, guarantee-backed loans and real estate secured loans that were taken out at least 1 year earlier. Up to 5 loans can be converted into a single real estate secured loan, and borrowers can also increase the amount when the available limit exceeds the outstanding balance of existing loans.

Loan terms, including interest rates and limits, are the same as Kakaobank's existing self-employed real estate secured loans. As of Tuesday, the lowest interest rate is 3.04 percent per year and the loan limit is up to 1 billion won, with a maximum loan term of 20 years. Eligible collateral includes apartment complexes, officetels and retail units in multi-owner shopping buildings.

Kakaobank explained it introduced an "automated repayment system" for the first time in the financial sector to simplify the refinancing process. Under the system, it transfers the loan amount to a repayment account at the existing financial institution at the same time the new loan is disbursed, allowing the existing loan to be repaid. It also verifies whether the repayment account is suitable and whether ancillary costs have been deposited.

Customers can apply by selecting "switch loan" in the self-employed real estate secured loan menu on the Kakaobank app. All customers who complete refinancing by Jan. 31 next year will receive 200,000 won in cashback.

A Kakaobank official said, "We consolidated business loans spread across multiple financial institutions into a single refinancing loan to improve interest rate benefits and the convenience of loan management."