Citibank Korea, Inc. (CEO, Ha Yung-Ku) plans to launch "UPL with First-year Discount" on April 6th that offers a rate cut in the first year of taking a loan.
Interest rate of this product is linked to 3-month CD rate, and the additional rate tiered by customer based on transaction performance and credit rating are lowered by 30% for the first year of the loan. For example, if 10%p.a. interest rate is charged on a three-year loan (CD rate 3.3% p.a., additional rate 6.61% p.a.), the scope of discount will be 1.98%p.a. and the rate charged will be 8.02%p.a. for the first year.
This is the third product in the 'UPL with Discount' series, following 'Perfect Offset Loan' that cuts rates based on the deposit balance linked to the loan account and 'UPL with Deeper Discount' that gives maximum 2.9%p.a. discount based on performance.
A person related to Citibank remarked that the product was designed to alleviate burden of customers in the wake of the recent interest rate hike. UPL with First-year Discount has 3~5 year tenor, 150MM maximum amount, and minimum rate of 5.5%p.a. (as of April 6, 2011).
source: City Bank