Signs of Overheating in Personal Loans Again... 450 Billion KRW Increase in 5 Major Banks Over 4 Days

Massive Demand Likely Driven by 'Bitt' and Others
Loan Surge Also Attributed to Uncertainty

Reference image of bank loan counter (Source=Yonhap News)

[Asia Economy Reporter Kim Hyo-jin] With the lending restrictions easing in the banking sector at the start of the new year, there is a surge in demand for personal credit loans. As the KOSPI continues its high-level rally, the trend of 'debt investment' (borrowing to invest) is becoming active again, and this momentum is expected to continue for the time being.

According to the banking sector on the 10th, the outstanding balance of credit loans at the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?stood at 134.1015 trillion KRW as of the 7th, an increase of 453.3 billion KRW compared to the end of December last year (133.6482 trillion KRW). This increase occurred within just seven days of the new year, or four business days.

New credit loans through overdraft accounts (limit transaction loans or automatic account loans) nearly doubled, rising from 1,048 cases at the end of December last year to 1,960 cases on the 7th.

Due to the government's strong loan management policy and the banking sector's implementation of high-intensity loan regulations, the outstanding balance of credit loans at the five major banks decreased by 44.4 billion KRW compared to the previous month, standing at 133.6482 trillion KRW at the end of December last year. This was the first decline in 11 months.

The trend observed until early this month is interpreted as a result of those who struggled with fund liquidity during the loan freeze at the end of last year hastening their steps. In particular, with the government planning to soon announce an advanced household loan management plan, there is concern that lending restrictions will tighten again, which may intensify efforts to secure as much funding as possible.

A representative from a commercial bank said, "There is uncertainty in the loan market," adding, "The psychology that 'it will become difficult again after the beginning of the year' could significantly increase the total loan volume."

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