Household Loans Hit Record High in March Due to Surge in Mortgage and Credit Loans

Household Loans in Banking Sector Surge Nearly 10 Trillion Won in March
Sharp Increase in Credit Loans Due to Expanded Household Fund Demand and Low Interest Rates

[Asia Economy Reporter Kangwook Cho] Last month, mortgage loans and credit loans surged, causing household loans in the banking sector to increase by nearly 10 trillion won. In particular, credit loans rose significantly due to expanded household funding demand and the impact of low interest rates.

According to the 'March 2020 Household Loan Trends (Provisional)' announced on the 11th by the Financial Services Commission and the Financial Supervisory Service, the total household loan balance across all financial sectors surged by 9.1 trillion won in March. This figure increased by more than 8 trillion won compared to the 900 billion won increase in March last year.

The financial authorities evaluated, "As of the end of March, the total household loan balance across all financial sectors increased by 5.6% compared to the same period last year, and the increase in March was 9.1 trillion won, showing an expanded growth compared to previous years."

In particular, not only mortgage loans but also other loans including credit loans increased significantly. The increase in mortgage loans across all financial sectors last month was 5.2 trillion won, expanding by 4 trillion won compared to 1.2 trillion won in the same month last year. The increase in other loans was 3.9 trillion won, surging by more than 4 trillion won compared to -300 billion won in the same period last year.

By sector, household loan increases in the banking sector reached 9.6 trillion won last month. This is nearly a 7 trillion won surge compared to 2.9 trillion won in the same month last year.

Specifically, mortgage loans in the banking sector increased by 6.3 trillion won due to increases in general mortgage loans (including policy mortgages, 3.0 trillion won), jeonse deposit loans (3.0 trillion won), and group loans (300 billion won). In particular, other loans in the banking sector increased by 3.3 trillion won, mainly credit loans, due to expanded household funding demand and the impact of low interest rates.

On the other hand, household loans in the secondary financial sector decreased by 500 billion won. Mortgage loans decreased by about 1 trillion won due to refinancing through the low-income安心 conversion loan, but other loans increased by 500 billion won as credit loans and contract loans (insurance) increased due to expanded funding demand.

The financial authorities explained, "In the banking sector, mortgage loans such as policy mortgage loans (including low-income安心 conversion loans) and jeonse loans expanded, and credit loans also increased due to expanded household funding demand and the impact of low interest rates." They added, "In the secondary financial sector as well, credit loan increases expanded due to increased funding demand."

The financial authorities forecasted, "Even after April, household loans will continue to increase to some extent due to unavoidable factors such as increased loan demand caused by COVID-19."

The financial authorities plan to closely monitor household loan increase trends by sector and type.

This content was produced with the assistance of AI translation services.