Hana Bank Launches First Domestic High-Interest Loan Product for Mid-to-Low Credit Borrowers

Hana Bank has launched South Korea’s first in-house mid-rate loan product, targeting mid- to low-credit borrowers with a total supply of 2 trillion won ($1.5 billion), according to a June 18 report by the financial news outlet KB의 생각.

The move marks a strategic shift for Hana Bank, which is now the first major Korean lender to develop and distribute its own mid-rate loan product without relying on external partners. Previous mid-rate loan offerings in Korea have typically been structured through partnerships with fintech firms or specialized lenders.

Hana Bank’s new product is designed to fill a gap in the market for borrowers with credit scores between 600 and 700, a segment often underserved by traditional banks. The bank has stated that the loans will carry interest rates between 8% and 12%, depending on the borrower’s creditworthiness and loan term.

Why is this significant?
Mid-rate loans have gained traction in South Korea as demand for flexible credit options has grown, particularly among younger borrowers and small business owners. According to the Bank of Korea, outstanding mid-rate loans in Korea reached 15.7 trillion won in 2025, up 18% from the previous year. Hana Bank’s entry into this space could intensify competition among lenders, potentially driving down rates for borrowers.

The bank’s decision to develop the product in-house also signals a broader trend among Korean financial institutions to expand their digital lending capabilities. In 2024, KB Kookmin Bank introduced a similar mid-rate loan product in partnership with a fintech startup, while Shinhan Bank has been testing AI-driven credit assessment tools to streamline approvals for mid-tier borrowers.

How does Hana Bank’s offering compare to existing mid-rate loans?
Unlike traditional bank loans, which typically require credit scores above 700, Hana Bank’s product is explicitly tailored to borrowers with scores between 600 and 700. The bank has also emphasized flexibility in loan terms, offering repayment periods ranging from one to five years.

A spokesperson for Hana Bank told KB의 생각 that the bank’s internal risk assessment models will allow for more personalized pricing, reducing the reliance on third-party data providers. “By controlling the entire loan lifecycle—from underwriting to servicing—we can offer more competitive terms than traditional partnerships,” the spokesperson said.

What comes next?
Hana Bank has not yet announced a formal launch date for the mid-rate loan product, but KB의 생각 reports that the bank plans to begin onboarding borrowers by the end of July 2026. The bank’s move could prompt other major lenders, including Woori Bank and Jeju Bank, to accelerate their own mid-rate loan initiatives.

Industry analysts suggest that Hana Bank’s entry into this segment may also influence regulatory scrutiny, as mid-rate loans have faced criticism in the past for high default rates among lower-credit borrowers. The Financial Services Commission (FSC) has previously warned lenders to ensure transparent pricing and risk disclosures in mid-rate loan products.

For borrowers, the introduction of Hana Bank’s mid-rate loans could mean greater access to credit, though experts caution that the higher interest rates—ranging from 8% to 12%—remain significantly above those of standard bank loans, which typically hover around 3% to 5%.

Key details at a glance:

• Product: Hana Bank’s first in-house mid-rate loan.
• Target borrowers: Credit scores between 600 and 700.
• Supply volume: 2 trillion won ($1.5 billion).
• Interest rates: 8% to 12%, depending on creditworthiness.
• Launch timeline: Expected by late July 2026.
• Regulatory context: FSC monitoring of mid-rate loan practices.