“I wish I could borrow money easily from my local Japan Post Bank.” “I want to know what kinds of loans Japan Post Bank offers.” In this article, we’ll explain the different types of loans available from Japan Post Bank and go over their pros and cons.
We’ll also introduce how to apply for Japan Post Bank loans that don’t require a credit check, as well as the process for automatic lending. We hope this information is helpful for anyone looking to borrow money from Japan Post Bank.
Types and Features of Japan Post Bank Loans
Following the privatization of Japan's postal services, Japan Post Bank Co., Ltd. was established in 2007 as a member of the Japan Post Group.
It's one of the largest banks in Japan, boasting the highest total assets, number of accounts, and ATMs nationwide.
You can use Japan Post Bank ATMs located inside FamilyMart stores with the same fees as those at standard Japan Post Bank ATMs.
The peace of mind of being able to deposit and withdraw money at any time, often with no fees during certain hours, is a real advantage. With bank counters available at post offices all across Japan, Japan Post Bank is incredibly convenient to use.
Home Loans
There are two main types of home loans: fixed-rate loans such as "Flat 35", and variable-rate loans like "Sony Bank Home Loan" and "SBI Shinsei Bank Home Loan". Flat 35 is a fixed-rate mortgage with a term of up to 35 years. The Japan Post Flat 35 service launched in 2021 and is currently available at 41 out of Japan Post Bank’s 233 directly operated branches nationwide.
Since the Japan Post Flat 35 offers a fixed rate for the entire loan period, it makes it easier to plan your repayments and avoids the risks associated with rising interest rates.
Among these, the "Flat 35S" plan offers a reduced interest rate for a specific period (between 5 and 10 years) if you purchase a high-quality home, such as those that are energy efficient, barrier-free, or have superior earthquake resistance.
Variable-rate home loans are available through partnerships with Sony Bank and SBI Shinsei Bank. These loans typically offer lower interest rates than fixed-rate loans, but your repayment amount will fluctuate in line with changes in interest rates.
Therefore, it’s recommended to only borrow an amount you can comfortably repay, even if the interest rate changes.
Overdraft Service
This is an overdraft service that you can add to your usual bank account or cash card. If your balance isn’t enough for a credit card payment or a withdrawal exceeds your current balance, the service will automatically lend you up to ¥300,000.
Your account balance will be shown as negative, and simply depositing money won’t automatically repay the overdraft. The standard repayment date is the 8th of each month, but you can also make extra payments at any time.
Automatic Loans Secured by Savings
You can take out a loan using your fixed-term or time deposit savings held in your general account as collateral. If you withdraw more than your available balance, a loan will be automatically provided.
Once you deposit funds into your account, the borrowed amount plus interest will be repaid immediately. The maximum loan amount is 90% of your deposit balance, up to 3 million yen per general account.
The repayment period is two years. If you are unable to pay back the loan within this period, your time deposit or fixed-term deposit used as collateral will be redeemed to cover the repayment.
Please note that for time deposits that mature in less than two years, the repayment period is limited to the term remaining until maturity.
Card Loans
Japan Post Bank's card loan service, "Shitaku", is provided through a loan agreement with Suruga Bank. Applications for new accounts were closed as of October 31, 2018. Only existing account holders can continue to use this service.
Automatic Loans Secured by Government Bonds
This service allows you to borrow money using government bonds managed in your Japan Post Bank general account as collateral. The government bonds must have been purchased at a post office or Japan Post Bank.
You can borrow up to 80% of the value of your government bonds, with a maximum limit of 2 million yen per person. If you withdraw more than your balance, your account will show a negative balance, indicating the amount borrowed.
Repayments—covering both principal and interest—are automatically made when you deposit money into your ordinary account. Please note that new applications for this service have been closed as of March 29, 2019, and it is only available to current users.
Benefits of Japan Post Bank Loans
Japan Post Bank is the largest financial institution in Japan. With the highest deposit balance in the country, Japan Post Bank is widely regarded as a highly reliable bank.
In this section, we’ll explain the advantages of choosing Japan Post Bank loan products.
You can apply in person at Japan Post Bank
You can apply for services in person at the counter at any Japan Post Bank branch nationwide. Since it's face-to-face, you can feel reassured by signing the contract while seeing each other in person.
You can also get advice on home loans directly at the counter, and you can book consultation times online or by phone. Being able to consult without waiting makes the process much more convenient and stress-free.
Please note that counter hours are from 9:00 am to 4:00 pm on weekdays, and they are closed on weekends.
Mortgage Protection Plans that Cover Cancer
With the variable interest rate home loans offered in partnership with Sony Bank, there are a variety of mortgage protection plans available to cover cancer and other illnesses.
・"Cancer Mortgage Protection 50": Covers 50% of your mortgage if you are diagnosed with cancer
・"Cancer Mortgage Protection 100%": Covers 100% of your mortgage plus a ¥1,000,000 benefit if you are diagnosed with cancer
・"Three Major Illness Protection": Covers 100% of your mortgage if you are diagnosed with any of the three major illnesses
・"Lifestyle Disease Protection": Adds hospitalization coverage to the Cancer Mortgage Protection 100 plan
・"Standard/Wide Mortgage Protection": Covers 100% of your mortgage in case of death, specific severe disabilities, or being diagnosed with a life expectancy of six months or less
When taking out a home loan, having a wide range of options to protect your health and your family’s future is a significant benefit.
Disadvantages of Japan Post Bank Loans
When taking out a loan, it’s important to consider not only the benefits, but also the drawbacks. The most crucial thing is to make sure you can accept these disadvantages before proceeding.
Here, we’ll go over the key disadvantages of Japan Post Bank loans that you should check before applying.
You Can't Get a Loan Without Collateral
When using Japan Post Bank's automatic lending service, collateral is required. Because you can borrow more than your account balance, the bank needs some form of guarantee that the loan will be repaid.
Collateral acts as security in case you're unable to pay back the loan. For the "Automatic Overdraft Secured by Savings," your time deposit or fixed deposit serves as the collateral. At present, it's not possible to take out these loans without providing collateral.
FLAT 35 Has Higher Interest Rates Than Variable Rate Mortgages
FLAT 35 is a home loan with a fixed interest rate for up to 35 years. Since the rate is fixed for the entire period, your interest rate won’t change even if market rates go down.
This means that if market interest rates drop in the future, you could end up paying more in interest compared to others. On the other hand, variable rate mortgages come with the risk of rate fluctuations, so their interest rates are set much lower than FLAT 35.
Even when compared to the variable rates offered by Sony Bank or SBI Shinsei Bank, which partner with Japan Post Bank, FLAT 35’s rates are about 1% higher (as of February 2023), however, having a fixed rate for up to 35 years makes it easier to plan your repayments.
If you want to avoid the risk of rate changes and prefer the security of predictable payments, a fixed-rate loan like FLAT 35 is recommended.
Yuucho Flat 35 Rates and Fees
The rates and fees for Yuucho Flat 35 are as follows:
・Yuucho Flat 35: Annual interest rate of 1.22% (for repayment periods of 20 years or less)
・Yuucho Flat 35: Annual interest rate of 1.38% (for repayment periods of 21 to 35 years)
・Yuucho Flat 35 loan amount: between 1 million yen and 80 million yen
・Loan processing fee: 2.2% of the loan amount (tax included)
・Late payment penalty: 14.5%
How to Apply for a Japan Post Bank Loan (Automatic Loan Service)
1. Prepare the required documents
2. Apply at the counter
3. Screening process
If you have collateral, screening is not required, and you can receive funds on the same day. The necessary documents are: personal identification (such as your driver’s license), a seal (inkan), your bankbook, and proof of collateral (for example, a time deposit bankbook).
Business hours are from 9 AM to 4 PM on weekdays; Japan Post Bank branches are closed on weekends. Both borrowing and repayment can easily be done at Japan Post Bank counters or ATMs.
Yucho Bank Loan (Automatic Lending) Screening Process
Yucho Bank’s automatic lending service does not require a screening process because your time deposits, fixed deposits, or government bonds are used as collateral.
As long as you have the necessary collateral, you can conveniently borrow money, even on the same day.
About Japan Post Bank
Japan Post Bank Co., Ltd. is headquartered in Chiyoda, Tokyo. With a capital of 3.5 trillion yen and 12,169 employees (as of March 2022), it is a huge company.
There are over 23,000 post office branches nationwide, and the bank leads the country in total account balances, number of accounts, and number of ATMs.
If you have questions about automatic loans, you can check the AI chat feature on the official Japan Post Bank website for frequently asked questions. For other inquiries, you can consult at your nearest post office branch.
There is no dedicated phone line for consultations regarding automatic loans or Flat 35 loans before borrowing, so it’s best to visit a branch in person. If you are already using a loan, you can call 0120-0860-35 / 048-615-0420 for assistance.
Summary
Japan Post Bank, established in 2007 and operated by the Japan Post Group, is one of the largest banks in Japan. One of the advantages of Japan Post Bank's loans is that you can apply and consult in person.
For home loans, the bank partners with Sony Bank, offering a wide range of group credit life insurance options to help you prepare for illnesses like cancer. One downside is that collateral is required for automatic lending services.
Additionally, while the interest rates for Flat 35 loans are generally higher than those for variable-rate loans, you should consider your risk tolerance for variable interest rates when choosing between a Flat 35 or a variable-rate mortgage.
Being able to borrow money easily from your local post office is a major benefit. Unlike online banks, the ability to handle everything directly at the counter provides greater peace of mind. You can also build trust by clearing up any concerns face-to-face.
If you're considering a loan, Japan Post Bank’s automatic lending or home loan options are definitely worth a look.
* Please note that applying for a loan always carries risks. Make sure to review the terms and conditions and proceed at your own risk.
