The maximum legal lending rate will be lowered to 24 percent starting from February of next year.
 
The government said revisions to the private lending act and the interest limitation act were approved by the Cabinet on Tuesday. The amendments will be promulgated next Tuesday and go into effect from February eighth after a three-month grace period.
 
With the revisions, the maximum legal lending rate applied to money lending businesses and credit finance firms will slide from 27-point-nine percent to 24 percent. The maximum lending rate for transactions worth more than 100-thousand won between individuals will decline from 25 to 24 percent.
 
The new rate will be applied to loan contracts that are newly clinched, renewed or extended next year. However, existing loan contracts can enjoy the lowered rates when they are resigned or their maturity is extended after next January.
 
Those who get more than a 24 percent lending rate when getting new loans or extending loans will face a prison sentence of up to three years or fines of up to 30 million won.