8percent Cuts Private Loan Interest by Up to 26% with Real Estate-Backed Loans

Online Investment-linked Finance (P2P Finance) platform Eight Percent is emerging as a practical alternative to high-interest moneylending, positively impacting household debt relief. Eight Percent provides real estate-backed loan interest rates averaging 10.2% per annum, which is approximately 3.6 percentage points lower than the average 13.8% for moneylenders according to the Financial Supervisory Service's survey, resulting in an effective reduction of users' interest burden by about 26%. This leads to annual interest savings of several million won, enhancing housing stability and the potential for credit recovery. It also effectively serves as a ladder for mid-to-low credit score individuals or those with insufficient financial history, who previously found it difficult to access institutional finance due to lack of financial information, allowing them to refinance high-interest moneylender loans into online investment-linked finance loans, thereby achieving substantial interest savings and entry into institutional finance. Established in 2014, Eight Percent, the nation's first online investment-linked finance platform, has contributed to alleviating financial polarization by popularizing the concept of 'mid-interest rate loans' in the domestic financial market. Currently, the outstanding balance of real estate-backed loans in the online investment-linked finance industry is approximately 600 billion won, which is only about 8% of the moneylending sector (approx. 7.4 trillion won) and 0.05% of all domestic financial institutions, but its potential is significant. Lee Hyo-jin, CEO of Eight Percent, emphasized the "role of providing practical interest rate reduction opportunities to users of high-interest moneylenders and lowering the threshold of institutional finance for financially vulnerable groups," pledging to expand the institutional role of online investment-linked finance as an alternative financial solution for improving the quality of household debt. The 'Online Investment-linked Finance Business Act (Ontu Act)', the world's first standalone P2P finance law, passed with overwhelming support in 2019, incorporated online investment-linked finance into institutional finance under the supervision and regulation of financial authorities. This has enabled individuals with non-standard incomes, such as foreigners, freelancers, and platform workers, to secure financial access, drawing attention as an important means of achieving inclusive finance.