The main opposition Democratic Party(DP) on Tuesday announced plans to significantly lower household loan interest rates by excluding items that financial institutions unfairly pass on to consumers, such as the legal costs for calculating additional interest rates.

This comes as the DP's policy committee announced a ‘set of three high interest rate burden relief' measures at the National Assembly on Tuesday afternoon.

In order to ease the burden of paying the principal and interest of household loans, the policy committee proposed a plan that requires banks to check whether a borrower’s credit status has improved at least once every half year and disclose relevant information to those who are likely to receive an interest rate cut.

It also includes measures to eradicate illegal loans by invalidating all contracts exceeding the legal maximum interest rate and doubling the reward for reporting loan-sharking, which currently stands at a maximum of 20 million won, or 15 thousand U.S. dollars, as well as a third pledge to exempt early mortgage loan repayment fees from financial institutions.

The latest set of pledges comes as the DP earlier this month also rolled out a set of campaign promises aimed at supporting small businesses, where it plans to significantly increase the amount of government subsidies business owners can receive when closing down businesses, while also introducing a long-term loan program that can be repaid over a maximum of 20 years.