Late interest rules for financial companies
Late interest rates at banks and other financial companies are capped at contract rate + up to 3%p and can't exceed the legal maximum (20% a year).
Late interest = overdue amount × late interest rate × days overdue ÷ 365
Individual Debtor Protection Act (effective Oct 17, 2024)
Even if a loan under ₩50M principal defaults and the benefit of term is lost, late interest can't be charged on principal that isn't due yet. Applies to agreements made or extended from Oct 17, 2024.
If the default goes on
- From 5+ business days overdue (₩100K or more), short-term default info is shared with credit bureaus and your credit score may drop.
- Past 30 days, consider Credit Counseling & Recovery Service pre-workout debt adjustment; before that, fast-track debt adjustment.
This calculator gives estimates based on published laws and criteria and is not legal advice. Before acting, be sure to check with the official agencies below.