This paper starts with revisiting the concept of policy loan and discusses how to reestablish its role in reflection of current economic development of Korea as well as recent environmental changes of the economy after global financial crisis. It is of significance to examine the history of policy loans by each stage of economic development from the early period of development to the promotion of heavy industry and to later stages of market liberalization. In particular, a statistical analysis is undertaken to assess the effect of policy loan on economic development of Korea in terms of export, investment and production. This paper also gives a global perspective on policy loans by consolidating survey data across countries. Finally it provides policy suggestions on prospect of the Korea policy loans in order to achieve the goal to be advanced economy.