If You Don't Do Debt Investment, Are You an Outcast?... The 2030 Loan Black Hole

Rapid Increase in Non-Face-to-Face Credit Loans Among Young Office Workers
Loan Demand Rises Amid Concerns of 'Tto Joilla'

[Asia Economy Reporter Kim Hyo-jin] Kim Ye-jin (32, pseudonym), who works at an IT company in Seoul, recently took out a 50 million won non-face-to-face exclusive credit loan from two commercial banks, thinking she needed to jump into the soaring stock market before it was too late.

Kim said, "Most of my close colleagues invest in stocks, and when we meet, the conversation is all about stocks," adding, "I wasn't very interested in investing and considered it someone else's story until last year, but seeing the KOSPI explode this year, I felt I couldn't just stay still, so after discussing with my husband, I hurriedly took out a loan."

Kim, who works a dual-income job and lives in a jeonse (long-term deposit) rental, plans to purchase a small apartment on the outskirts of Seoul and move in this fall when her current lease expires.

She said, "Housing prices have risen so much that I think I will have to take on a huge amount of debt to proceed as planned," adding, "I never thought I would end up doing both debt investment (debt-financed stock investment) and 'Yeongkkeul' (pulling together all my resources) that are currently all the rage." Kim also added, "If housing prices continue to rise significantly, I am considering postponing my plan and investing more in stocks instead."

Supported by ultra-low interest rates and high liquidity, skyrocketing housing prices and a boiling stock market are rapidly driving people in their 20s and 30s into the loan market. In particular, among young office workers, it is becoming almost 'essential' to invest in stocks, and they are rushing to gather funds through relatively accessible non-face-to-face credit loan products.

According to the banking sector on the 14th, among non-face-to-face credit loan borrowers who are office workers at a certain commercial bank from the beginning of this year until the 13th, about 45%, nearly half, were in their 20s and 30s. Those in their 20s accounted for 16%, and those in their 30s accounted for 29%.

A bank official explained, "It seems clear that the proportion of borrowers in their 20s and 30s has significantly increased since the beginning of the year," adding, "Especially, the proportion of borrowers in their 20s has noticeably increased."

In the case of Bank B, it was estimated that more than half of the non-face-to-face credit loans during the same period were taken out by people in their 20s and 30s.

Due to the increase in loans among people in their 20s and 30s, the balance of personal credit loans at major commercial banks is showing signs of a sharp increase again this year. The credit loan balance of KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup Banks, which was 133.6482 trillion won at the end of December last year, rose to 133.928 trillion won on the 4th of this month and 134.5237 trillion won on the 11th.

Continued Increase in Credit Loans at the Beginning of the Year

A banking sector official diagnosed, "With the somewhat eased loan regulations that had been strictly enforced until last year, combined with anxiety about when they might tighten again and a stock market that stimulates investment sentiment, loans are being encouraged."

The trend of young people becoming 'major players' in the loan market is also reflected in the age distribution of loan borrowers in the overall household loan market. According to the Bank of Korea, as of the end of the third quarter last year, household loans for people in their 20s and 30s increased by 8.5% compared to the same period the previous year, which was a higher growth rate than other age groups (6.5%).

The Bank of Korea analyzed, "The main reasons for the increase in loans are the rise in demand for jeonse and monthly rent housing and housing purchases, as well as the expansion of demand for stock investment," adding, "In particular, there was high demand for non-face-to-face credit loans and jeonse and monthly rent deposit loan support, which are more accessible to young people."

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