Legal maximum interest rate
- For financial companies, registered lenders and loans between individuals alike, interest above 20% a year is void.
- Interest paid above 20% is treated as repaying principal, and if you've repaid all the principal, you can claim it back.
- From July 22, 2025, loan contracts above 60% a year (3× the legal rate) are void for both principal and interest. Contracts made through antisocial means such as assault or threats are also void.
- Unregistered illegal lenders can't collect interest even with a formal contract.
Prepaid interest and fees count as interest
Prepaid interest, fees, notarization costs — whatever they're called, anything taken in exchange for the loan counts as interest. E.g. lending "₩1M" but handing over only ₩900K and collecting ₩1M a week later is an actual annual rate above 500%.
Reporting illegal private lending
Report to the FSS Illegal Private Finance Report Center (1332, no area code) or the police (112), and get free debtor's representative support from the Legal Aid Corporation or Korea Inclusive Finance Agency.
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.