If you change your mind after taking out a loan in Korea, you can back out within 14 days without giving a reason. Article 46 of the Financial Consumer Protection Act lets an ordinary financial consumer who applied for a loan-type product withdraw within 14 days from the day the contract papers were received (or the contract date where papers need not be given), or from the day the money was paid if that came later. For loans, sending notice is not enough: the withdrawal takes effect when you return the principal, the contract interest and costs the lender already paid to third parties (stamp duty, registration and the like). The lender can’t claim damages or a penalty. Borrow 100 million won at 4.5% for 7 days and the interest is 86,301 won (our example).
1. Period: 14 days from the papers (or the money, if later) — the first day not counted (Civil Act Art. 157, our reading).
2. Effect: notice sent + principal, interest and third-party costs returned — both are needed (Art. 46(2)2).
3. The lender refunds within 3 business days of getting the money back, fees included, and can’t charge a penalty (Art. 46(3), (4)).
Calculator
Updates as you type. 14 days run from the day after the papers arrive (or the money, if later). Interest = principal × rate × days ÷ 365, rounded down (our method; the contract may round differently). Only Saturdays, Sundays and the 2026 December–2027 Korean public holidays we listed (substitute holidays included) are applied; check temporary holidays and other years yourself.
What the Act says — Art. 46(1)–(4)
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Period (1)3 | 14 days from receiving the contract papers or from the contract date; from the payment date if money arrived later; a longer agreed period applies | Papers first, money later: count from the money (our gloss) |
| Who (1) | An ordinary financial consumer who applied for a loan-type product | Professional consumers aren’t covered |
| When it takes effect (2)2 | When the written notice is sent and (a) the money or goods received, (b) related interest and (c) fees and costs already paid to third parties are returned | Insurance and investment take effect on sending (1)1; only loans need repayment |
| Lender’s refund (3)3 | Within 3 business days of getting the money, interest and fees back, the lender returns what it received, fees included; late refunds carry extra | Fees the lender took read as included (our reading) |
| No penalty (4) | The lender can’t claim damages, penalties or other money for the withdrawal | — |
| Unfavourable terms (6) | Terms against (1)–(5) that disadvantage the consumer are void | — |
What the Decree fills in — Art. 37
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Written notice (3) | Email, mobile text message or similar electronic notice, or other methods the Financial Services Commission sets | Not only paper letters |
| Tell the seller (4) | After sending, tell the direct seller without delay that you sent it | Follow up by phone or app (our gloss) |
| Interest (5) | Interest at the contract rate from the day the money was paid to the day it is returned | Day counting and rounding follow the contract |
| Third-party costs (6) | Costs the lender already paid to others: 1. stamp duty and other taxes and charges, 2. registration costs such as a mortgage, 3. others the Commission sets | The lender’s own fees aren’t listed here (our reading) |
| Refund account (7) | Paid into an account the consumer names | — |
| Late refund (8) | Late days are paid at the contract’s default rate on the amount, by the day | — |
Loans you can’t withdraw from — Decree Art. 37(1)3
The Decree excludes: (a) facility leasing, instalment finance and deferred-payment sales under the Specialised Credit Finance Business Act (only where the goods were already received within the period), (b) linked loans under the online investment-linked finance law, (c) credit extended under Capital Markets Act Art. 72(1) (only where pledged securities were sold within the period), and (d) other products the Financial Services Commission sets. We didn’t read the Commission’s notice for (d).
Counting the days — our examples
| Case (our example) | Last day | Worth noting (our sum) |
|---|---|---|
| Papers and money on Mon 2 Nov 2026 | Mon 16 Nov | 14th day counting from 3 Nov |
| Papers 2 Nov, money Thu 5 Nov | Thu 19 Nov | Money later, so from the payment date |
| Papers and money Sat 7 Nov | Mon 23 Nov | 14th day, 21 Nov, is a Saturday → Monday (Civil Act Art. 161) |
| Papers and money Fri 11 Dec | Mon 28 Dec | 14th day is 25 December (Christmas) → past the weekend |
Counting the loan’s 14 days by the Civil Act rules (Art. 157 first day excluded, Art. 161 move past Saturdays and public holidays) is our reading; the Act sets no counting rule of its own, so leave a few days’ margin. General period counting is in the legal period calculator.
What you hand back — our example
| Item (our example) | Amount | Worth noting (our sum) |
|---|---|---|
| Principal received | 100,000,000 won | — |
| Contract interest 4.5%, 2–9 November, 7 days | 86,301 won | 100 million × 4.5% × 7 ÷ 365, rounded down |
| Stamp duty and other third-party costs (example figure) | 35,000 won | Ask the lender for the real figure |
| Total returned | 100,121,301 won | Withdrawal takes effect when this is returned |
| Lender refunds its fees by | Thu 12 November | 3 business days after Mon 9 November |
The 35,000 won is a figure we picked to show the sum, not the real stamp duty. How much stamp duty applies, and how lender and borrower share it, isn’t in the articles we read.
Checklist
- ☐ Note the later of the papers date and the payment date
- ☐ Withdraw by email or text or another method that leaves a record (Decree Art. 37(3))
- ☐ Tell the lender you sent it (Art. 37(4))
- ☐ Return principal, interest and third-party costs together — principal alone doesn’t make it effective
- ☐ Check any fees come back within 3 business days
Questions that remain
What if the 14 days have passed?
You can’t withdraw, but you can still repay early, which may carry a prepayment fee. Art. 20(1)4(b) bars prepayment fees except in a few cases such as repayment within 3 years of the loan. See the prepayment fee calculator.
What if the sale broke the rules?
A contract made in breach of duties such as explanation can be terminated on request, separately from withdrawal. See the unlawful contract termination calculator.
Is this the same as withdrawing from a card instalment purchase?
No, that’s another Act. See card instalment withdrawal.
Sources
- Korean law database (law.go.kr) — Financial Consumer Protection Act Arts. 20, 46 — source (current text, effective 2 January 2026, Act No. 21065; checked 2 November 2026). Art. 46(1)3 14 days and the payment-date rule, (2)2 when it takes effect (notice + return of principal, interest, costs), (3)3 refund in 3 business days, (4) no penalty, (6) unfavourable terms void, Art. 20(1)4(b) prepayment fees.
- Korean law database — Enforcement Decree Art. 37 — source (current text, effective 28 April 2026, Presidential Decree No. 36287; checked 2 November 2026). Excluded loans (1)3, notice methods, telling the seller, interest and third-party costs, nominated account, daily default interest.
- Korean law database — Civil Act Arts. 157, 161 — source (current text, effective 17 March 2026, Act No. 21454; checked 2 November 2026). First day excluded; a period ending on a Saturday or public holiday ends the next day.
- Not read. The Commission’s supervisory regulation, the Stamp Tax Act, case law.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- Your lender — how to file, the actual interest and cost figures.
- Financial Supervisory Service — complaints and dispute mediation (we didn’t read its guidance this time).
Written on 2 November 2026. The content is from the source; the glosses are ours.
