20s Falling into 'Sinbulja' Status... Average Credit Card Loan Balance of 11.71 Million Won per Person

Loan Balance of 20s Reaches 2 Trillion Won in First Half of Year... Debt Adjustment Up 31% in 4 Years
20s Using Overdrafts and Card Loans
Data from Jeon Jae-su, Democratic Party Lawmaker

[Image source=Yonhap News]

[Asia Economy Reporter Kim Min-young] The outstanding loan balance for people in their 20s exceeded 2 trillion won in the first half of this year. This represents an increase of more than 60 billion won in just six months. Overdraft accounts and overdraft card loans (card loans) have particularly surged. As the economic recession and employment difficulties prolong, the number of people in their 20s falling into delinquency has increased, highlighting the urgent need for countermeasures.

According to data received on the 26th from the Financial Supervisory Service by Jeon Jae-su, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, the loan balance of overdraft products used by people in their 20s in the financial sector was recorded at 2.1451 trillion won as of the end of June. This has steadily increased compared to 1.9734 trillion won at the end of 2018 and 2.0738 trillion won at the end of last year.

By industry sector, savings banks showed the most noticeable increase. As of the first half of the year, the overdraft account loan balance at savings banks recorded 62 billion won, an increase of 10.4 billion won (20.2%) compared to the end of last year. During the same period, the overdraft account loan balance at banks was 2.0763 trillion won, up about 60.8 billion won (3%) from the end of last year. The overdraft card loan balance at credit finance companies increased by 100 million won (1.5%) to 6.8 billion won.

In particular, while the total overdraft account loan balance at savings banks decreased by 16.5% compared to the end of last year, it increased by 20.2% among people in their 20s. This indicates that young people are flocking to the secondary financial sector, where loans are easier to obtain than at banks.

The number of overdraft account loans used by people in their 20s at banks was 177,000, with an average loan amount of 11.71 million won per person.

Savings bank loans recorded 14,745 cases, and credit finance companies 2,999 cases. It is estimated that the average loan amount per person was 4.2 million won and 2.27 million won, respectively.

The new issuance amount of overdraft products for people in their 20s is also on the rise. It increased by 11.2% from 2.5304 trillion won in 2017 to 2.8138 trillion won last year, and was recorded at 1.7613 trillion won in the first half of this year alone.

The problem is that applications for debt adjustment are also increasing. The number of people in their 20s who applied for debt adjustment at the Credit Recovery Committee increased by 30.8%, from 9,519 in 2015 to 12,455 last year. As the economic recession and employment difficulties prolong, the debt of people in their 20s is increasing, and the number of young people ultimately becoming financial delinquent borrowers (credit delinquents) is rising.

Representative Jeon said, "Following student loan debt, young people in their 20s are now choosing overdraft accounts and overdraft cards," and added, "It is time to prepare comprehensive measures, including strengthening support projects to reduce youth debt."

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