Household Debt from Banks Exceeded 100 Trillion Won Last Year Due to Yeongkkeul and Debt Investment... Record High (Comprehensive)

Household Loans Increased by a Record 112 Trillion Last Year
Household Loans Increased by 8.5 Trillion in December... Sharp Decline Due to Tightening Measures

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyo-jin] Household loans exceeded 100 trillion won last year. This is interpreted as a result of the impact of the novel coronavirus infection (COVID-19), as well as demand for debt-financed investment (debt investment), and "Yeongkkeul" (pulling together even one's soul) for real estate and stock investments.

However, last month, the monthly increase was halved due to strong tightening of household loans by financial authorities and banks.

According to the 'Household Loan Trends in December' announced on the 14th by the Financial Services Commission and the Financial Supervisory Service, household loans across the entire financial sector, including the secondary financial sector (1.8 trillion won), increased by 8.5 trillion won last month.

Mortgage loans in the secondary financial sector increased by 400 billion won, and other loans such as credit loans increased by 1.4 trillion won. The Financial Services Commission and the Financial Supervisory Service stated, "The increase in household loans has significantly slowed compared to the previous month (18.7 trillion won)."

Corporate loans, as of the end of December last year, had a bank won-denominated loan balance of 976.4 trillion won, an increase of 107.4 trillion won compared to the end of the previous year. This is the largest annual increase since related statistics began in 2009.

However, due to strong loan regulations such as the suspension of credit loan sales, household loans in the financial sector increased by only 8.5 trillion won last month compared to the previous month. The increase decreased by 10.2 trillion won compared to the previous month (18.7 trillion won).

During this period, bank household loans increased by 6.7 trillion won compared to the previous month. The increase decreased by 6.9 trillion won compared to the previous month (13.6 trillion won). Household loans in the secondary financial sector increased by 1.8 trillion won. Compared to the previous month (5.1 trillion won), the increase decreased by 3.3 trillion won.

Household Loans Surpass 100 Trillion Last Year... Impact of COVID-19, Yeongkkeul, and Debt Investment

During the same period, mortgage loans increased by 6.7 trillion won. This is 100 billion won less than the previous month’s increase of 6.8 trillion won.

Bank mortgage loans increased by 6.3 trillion won. This is 100 billion won more than the previous month (6.2 trillion won). In the case of the secondary financial sector, it increased by 400 billion won, which is 200 billion won less than the previous month (600 billion won).

Other loans such as credit loans increased by 1.8 trillion won. Compared to the previous month’s increase of 11.9 trillion won, the increase decreased by 10.1 trillion won.

Other loans in the banking sector increased by 400 billion won, with the increase decreasing by 7 trillion won compared to the previous month (7.4 trillion won), and the secondary financial sector increased by 1.4 trillion won, which is 3.1 trillion won less than the previous month (4.5 trillion won).

A financial authority official said, "This year, we will closely monitor the trend of household loans and carefully check the implementation status of management measures," adding, "In the first quarter of this year, we will prepare an advanced household debt plan to establish a screening practice focused on repayment ability and gradually shift the total debt service ratio (DSR) management standard to the borrower unit, thereby steadily promoting the soft landing of household debt."

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