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Car Loan Calculator — South Korea

Estimate your monthly car-loan installment in KRW using South Korea's typical auto-finance rates, and see the full interest cost. No signup, no account needed.

KRW
%
%
yrs
Monthly installment₩626,117
Financed₩32,000,000
Total markup / interest₩5,567,005
Total payable₩37,567,005
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Car finance rates in South Korea (2026)

Car loans in South Korea typically run about 4.5–7% p.a. Captive lenders and card companies (Shinhan Card, Samsung Card) also finance cars.

These are reference figures for 2026 - always confirm the current rate and the effective (reducing-balance) APR with the lender before you commit.

Where to get a car loan in South Korea

Commonly used providers include Hyundai Capital, KB Capital, KB, Shinhan and Hana. Rates and terms vary by lender, your credit profile, and whether you are buying new or used - it pays to compare at least two or three offers.

Deposit and loan term

Deposit requirements vary by lender. Loan terms run up to about 5–7 years. A bigger deposit and a shorter term both cut the total interest you pay - use the calculator above to see the trade-off for your own numbers.

Worked example

For every ₩32,000,000 financed at 6.50% over 5 years:

Scale to your financed amount, and remember a bigger deposit and shorter term lower the total interest.

How to pay less interest on your car loan

What car loan rates look like in South Korea right now

Auto financing costs in Korea move with the Bank of Korea's benchmark. The BOK raised its base rate to 3.00% on August 27, 2026, the first back-to-back hike in over three years, which keeps a floor under standard bank and capital-company auto loan pricing. Against that backdrop, captive lenders still run aggressive promotions to move inventory: Hyundai Capital's September 2026 campaign offers 0% interest for 12-month loans up to 20 million won, 1.9% for 24 months, and discounted EV financing — 2.8% over 36 months on the Ioniq 5, Ioniq 6 and Kona EV, and 3.6% over 36 months on Kia's EV3, EV6 and EV9. These promotional rates are well below what a walk-in bank loan typically costs, but they usually apply only to specific trims, loan caps or manufacturer-brand vehicles, so the advertised rate isn't automatically available on every purchase.

Taxes add meaningfully to the real cost of a car

Beyond the loan itself, buyers in Korea owe acquisition tax on registration: 7% of the vehicle price for a standard non-commercial passenger car (the tax is technically levied on price divided by 1.1, so it works out to roughly 6.36% of the sticker price) and just 4% for compact cars under 1,000cc. A 5% individual consumption tax also applies to new cars; the government's temporary cut to 3.5% was extended only through June 30, 2026, so check with the Ministry of Economy and Finance whether a further extension applies before you buy. Compact cars and electric or hydrogen vehicles also qualify for time-limited acquisition-tax reductions; check the current caps on Wetax or with your local government before you buy.

A regulatory gap in how car debt is counted

South Korea's debt service ratio (DSR) rules cap how much of a borrower's income can go to loan repayments, and they do apply to conventional bank and capital-company auto loans. But long-term auto installment plans sold through credit card companies — often running up to 60 months — are classified as an "ancillary service" rather than a loan, so they fall outside DSR calculations entirely. Regulators have flagged the gap: an estimated 3.5 trillion won in card-company auto financing bypassed DSR limits in a single year, with Hyundai Card the heaviest user of the structure.

Worked examples on a ₩35,000,000 car

Using Hyundai Capital's verified September 2026 promo rates: at 0% APR over 12 months, the payment is ₩2,916,667/mo with zero interest. At 1.9% APR over 24 months, the payment is about ₩1,487,584/mo, total interest about ₩702,016. At 2.8% APR over 36 months (EV rate), the payment is about ₩1,015,038/mo, total interest about ₩1,541,368.

The annual ownership tax that keeps running after the loan

Beyond the acquisition tax paid once at purchase, every private passenger car in Korea owes an annual car ownership tax (자동차세), billed by local government each June and December. The base rate is charged per cc of engine displacement: 80 won/cc up to 1,000cc, 140 won/cc for 1,001–1,600cc, and 200 won/cc above 1,600cc — so a common 1,998cc sedan owes roughly 224,000 won on its first 1,600cc plus 79,600 won on the remaining 398cc, for a base tax of about 303,600 won. A mandatory 30% local education surtax is then added on top, per Seocho District's official tax guidance, bringing that example car's total annual bill to roughly 394,680 won.

Older cars get a break: starting in the vehicle's third year, the base tax (before the surtax) is reduced by 5% and that reduction grows by 5 percentage points a year, capping at a 50% reduction from year 12 onward. Owners can also prepay the whole year's tax in January for a discount of roughly 4.58% off the total bill, an option worth factoring in alongside the loan repayment schedule. Because this tax is billed separately by the local government twice a year rather than folded into any loan or dealer invoice, it is easy for a first-time buyer comparing only the monthly instalment shown by a calculator like this one to miss it entirely when working out the real annual cost of owning the car.

Car insurance is compulsory — and driving without it is a criminal offence

Financing a car in Korea does not remove the separate legal requirement to insure it. Under Article 5 of the Motor Vehicle Damage Compensation Guarantee Act (자동차손해배상보장법), every vehicle owner must carry liability insurance covering death/injury to third parties (대인배상) and damage to third-party property (대물배상) before the car can legally be driven; as of the enforcement decree effective 1 January 2025, the minimum death-coverage limit is 150,000,000 won per person (with a floor of 20,000,000 won even for lower-value claims). Both Korea's Ministry of Government Legislation portal and independent guides confirm the same criminal penalty for driving uninsured: up to one year's imprisonment or a fine of up to 10,000,000 won, on top of administrative fines and possible plate confiscation. Lenders financing a car in Korea will generally require proof this insurance is in place before releasing funds, separate from any comprehensive cover you choose to add. The compulsory policy covers only third-party injury and property damage up to the statutory limits; it does not cover damage to your own financed vehicle, which is why lenders on a auto loan or installment plan routinely also require a voluntary comprehensive policy for the duration of the financing, adding a further ongoing cost alongside the loan repayment and the ownership tax above.

Frequently Asked Questions

What is the typical car loan rate in South Korea?

As a 2026 reference, car finance in South Korea runs about 4.5–7% p.a. Your actual rate depends on the lender, your credit profile, and whether the car is new or used.

How much deposit do I need for a car loan in South Korea?

Deposit requirements vary by lender. A larger deposit lowers both your monthly payment and the total interest you pay.

Which lenders offer car loans in South Korea?

Commonly used providers include Hyundai Capital, KB Capital, KB, Shinhan and Hana. It pays to compare two or three offers, since rates and terms vary by lender and by your credit profile.

How is the car loan installment calculated?

Using the reducing-balance formula P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1) on the financed amount. Dealers may quote a lower-looking flat rate; convert to the effective rate to compare.

What is South Korea's current base interest rate, and how does it affect car loans?

The Bank of Korea raised its base rate to 3.00% on August 27, 2026. Bank and capital-company auto loan rates are generally priced above this benchmark, though automaker-affiliated lenders like Hyundai Capital frequently offer promotional rates well below market level to support vehicle sales.

Are all advertised 0% or low-interest car financing deals in Korea available to every buyer?

No. As of Hyundai Capital's September 2026 promotion, rates like 0% for 12 months or 1.9% for 24 months typically apply to specific loan amounts (for example, up to 20 million won), select trims, or manufacturer-brand vehicles (Hyundai, Kia, Genesis), not to every purchase or every buyer's credit profile.

Do all car financing products in Korea count toward the DSR limit?

Not entirely. Bank and capital-company auto loans are counted as loans under DSR rules, but long-term auto installment plans sold by credit card companies are classified as an ancillary service rather than a loan, so they are excluded from DSR calculations even though they function as multi-year debt.

How much annual ownership tax will I owe on top of my car loan in Korea?

It depends on engine size: 80 won per cc up to 1,000cc, 140 won/cc for 1,001-1,600cc, and 200 won/cc above 1,600cc, plus a mandatory 30% local education surtax. A typical 1,998cc sedan owes roughly 394,680 won a year in total. Cars 3+ years old get a growing discount, capped at 50% off the base tax from year 12.

Is car insurance required by law in South Korea, separate from the loan?

Yes. The Motor Vehicle Damage Compensation Guarantee Act requires every car owner to carry compulsory liability insurance (covering third-party injury and property damage) before driving. Driving uninsured can bring up to one year in prison or a fine of up to 10,000,000 won, regardless of how the car was financed.

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Sources

Rates are compiled from each country's central-bank publications and the typical offerings of its major commercial banks, reviewed for 2026 and subject to change — always confirm the current rate with a lender before deciding. See our methodology and editorial policy for how we source and update this data.

Written by Sheryar, founder of fin·calc. Updated September 2026 — rates verified against the sources below.

Additional sources for this page

Sources: Bank of Korea Raises Base Rate to 3%, Seoul Economic Daily; Hyundai Capital September 2026 financing promotion, Global Economic; Seoul Metropolitan Government, 취득세 세목별 안내 (non-commercial passenger cars 7%, light cars 4%) (accessed 15 October 2026). Korea.kr (Government of Korea policy news), 자동차 개소세 인하 내년 6월까지 연장 (December 2025; seen 15 October 2026). Card-company auto installment DSR gap, Financial News. Accessed September 2026. See our methodology and editorial policy for how we source and update this data.

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