'Loan Block Imminent'... Credit Loans Surge 6 Times in One Week

Hana Bank announced that it will limit the personal credit loan ceiling to "within the range of individual annual income." The photo shows the Hana Bank headquarters branch in Jung-gu, Seoul, on the 27th. Photo by Jinhyung Kang aymsdream@

[Asia Economy Reporter Kim Jin-ho] As major commercial banks have stopped lending following the financial authorities' policy to reduce household loans, speculative demand has become evident, with the increase in unsecured loans soaring sixfold within a week. This is because more borrowers are taking out loans in advance due to the significant reduction in loan limits to within 'annual salary' starting next month.

According to the financial sector on the 29th, the outstanding balance of unsecured loans at the five major commercial banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?stood at 143.1804 trillion won as of the 26th, increasing by 2.882 trillion won in seven days since the 20th. This is about 6.2 times the increase of 467.9 billion won recorded in the previous week (13th?19th).

In particular, the balance of overdraft accounts increased by 2.6921 trillion won within a week. During the same period, a total of 15,366 new overdraft accounts were opened at the five banks.

Including 330.8 billion won in jeonse deposit loans, housing mortgage loans also increased by 1.3949 trillion won, but the increase was not larger than the previous week’s 1.4854 trillion won. Although NH Nonghyup Bank announced a suspension of mortgage loan issuance on the 19th, there has not yet been a balloon effect with demand shifting to other banks.

A financial sector official said, "Since housing mortgage loans require prior contract agreements, the impact of Nonghyup Bank’s loan suspension is unlikely to appear immediately," and added, "The balloon effect is expected to become apparent in earnest after mid-next month."

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