FINANCIAL UTILITY (KOREAN-SPECIFIC)

Jeonse Loan Limit Calculator (with DSR Caps)

Calculate your maximum loan limit for securing a Korean Jeonse deposit by factoring in LTV limits and South Korea's DSR 40% income-to-debt ceiling.

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Jeonse Loan and DSR (Debt Service Ratio) Regulations

When borrowing funds under Korea's key-money lease system, your limit is determined by three variables: LTV (Loan-to-Value) capping the loan at 80% of deposit, the **absolute guaranty cap** (typically 500M KRW), and the **DSR** representing your debt-to-income servicing capabilities.

DSR 40% Calculation Formula

Korean commercial banks apply a DSR cap of 40% on household debts. Since Jeonse loans operate on an interest-only bullet structure (no monthly principal repayment), only the annual interest payments (Loan Amount * Interest Rate) are added to the borrower's total debt service load.

DSR = (Existing Annual Debt Service + New Jeonse Annual Interest) / Annual Income ≤ 40%

Max New Interest Allowed = (Annual Income × 0.40) - Existing Annual Debt Service
Max DSR Loan Limit = Max New Interest Allowed / Expected Interest Rate

Frequently Asked Questions (FAQ)

Are Jeonse loans exempt from DSR rules?

While historically exempted, financial regulators have tightened limits by including Jeonse interest payments under DSR calculation reviews. This simulator enforces the strict 40% banking DSR threshold to reflect recent guidelines.

Will existing credit loans lower my Jeonse limit?

Yes. If your annual repayments for credit loans or credit cards are high, they consume your total 40% DSR allowance, leaving a smaller portion for new interest payments, which lowers your final loan limit.

Which limit becomes my final loan limit?

The final loan limit is **the lowest of the three**: the LTV cap (80% of deposit), the DSR cap, and the absolute guarantee cap (typically 500 million KRW).