"I Live Alone"... Youth Monthly Rent Loans Triple 'High Kick' (Comprehensive)

Three Major Commercial Banks Surpass 10 Trillion Won on September 1
More Than Triple Increase Compared to End of Last Year

[Asia Economy Reporter Park Sun-mi] The scale of youth-tailored jeonse and monthly rent loans at commercial banks has tripled since the beginning of the year. This is attributed to the increased demand for policy finance among young people due to rising real estate prices and the growing number of young people dreaming of independent living spaces.

According to the financial sector on the 8th, the total amount of youth-tailored jeonse and monthly rent loans at three major commercial banks stood at 1.0689 trillion won as of the end of September. This is more than three times the 346.2 billion won recorded at the end of December last year. All banks are setting new monthly records. In the case of Bank A, the number of accounts for youth-tailored jeonse and monthly rent loan products, which were only three when first launched in May last year, increased to 5,072 by the end of September this year.

Youth-tailored jeonse and monthly rent loans are products launched in May last year by the Financial Services Commission in collaboration with the Korea Housing Finance Corporation and commercial banks to stabilize housing for young people without homes. They provide support for deposits (up to 70 million won) and monthly rent (up to 500,000 won per month) at interest rates in the 2% range for youth aged 34 and under. The eligible annual income for the loan is 70 million won or less.

'Living Alone' Trend... Increase in Youth Jeonse and Monthly Rent Loan Scale
Loans Inevitable Due to Rising Rent

The increase in youth jeonse and monthly rent loans reflects the social trend of a rapidly growing number of young people living alone, known as the 'Living Alone' trend. According to Statistics Korea, the number of single-person households, which was in the early 5 million range in 2015, exceeded 6 million last year. The increase in single-person households is due to more young people giving up on marriage or marrying late. The crude marriage rate, which indicates the number of marriages per 1,000 people, recorded an all-time low of 4.7 last year since statistics began in 1970.

Additionally, the rapid rise in real estate sales prices and rents, to the extent that young people have no choice but to rely on policy finance, has also led to the increase in youth jeonse and monthly rent loan scale. In a survey on 'Perceptions of Home Ownership' conducted among 2,889 young people in their 20s, 78% of respondents expected housing prices to continue rising, and 80.5% anticipated that rents for jeonse and monthly rent housing would also increase in the future.

Accordingly, the Financial Services Commission increased the supply scale of youth-tailored jeonse and monthly rent loans from 1.1 trillion won to 4.1 trillion won in March this year, adding 3 trillion won to enable more young people without homes to benefit. The Commission expects that up to 80,000 young people will be able to benefit from these loans.

Banks are actively launching monthly rent-exclusive financial products, anticipating that the demand for monthly rent loans among young people who find it difficult to prepare large sums of money will surge further. Shinhan Bank recently added monthly rent loans to its mobile-only 'Solpyeonhan Jeonse Loan.' By submitting a monthly rent contract, borrowers can receive loans up to 50 million won for a maximum of 24 months. Woori Bank is offering the 'Woori Youth Tailored Monthly Rent Loan' product, which allows youth aged 34 and under to borrow up to 12 million won at interest rates in the 2% range.

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