"Can I Get a Loan?"... Loan Refugees Roaming Bank Branches

Following Woori Bank, KB Kookmin Bank Also Shifts to Monthly and Branch-Level Household Loan Management System

[Asia Economy Reporter Park Sun-mi] "I went to Kookmin Bank to submit a loan application to prepare funds for Jeonse eviction, but they said the October quota was already full. The counter staff said it would be difficult next month as well and they are not accepting applications. I went to the bank in the 6th week after the execution date, but I was rejected, so for the time being, I have to borrow money through family and acquaintances."

Following Woori Bank, KB Kookmin Bank has switched to a monthly and branch-level management system for household loans, and complaints from real borrowers who are blocked from getting loans are pouring in. Branches that have already reached their loan limits are emerging one after another, resulting in repeated loan rejections. Woori Bank and Kookmin Bank say they provide additional loan limits to help real borrowers even if some branches have reached their loan limits. However, among real borrowers, dissatisfaction is mounting as loans are actually being rejected due to branch-level limit exhaustion.

According to the banking sector on the 7th, Kookmin Bank has been managing the total volume of household loans from this month by allocating new household loan limits differently by month and by branch. The bank plans to allocate limits proportionally to loan performance by branch from January to September this year and maintain the branch-level limit management system temporarily until the end of the year. To protect low-income and real borrowers, group loans (interim payments and resident loans), Korea Housing Finance Corporation’s Bogeumjari Loan, and fund loans are excluded from branch-level management.

Accordingly, customers who visit branches where the loan limit has been reached must find other branches with available quota to secure funds. Since there is no separate notice issued by branches regarding loan limit exhaustion, customers have no choice but to search for branches where loans are still available by themselves.

A Kookmin Bank official explained, "This is a temporary measure operating until the end of the year due to the expanding increase despite household loan management. To minimize inconvenience, customers who visit branches where loans are not possible may be connected to other branches with available limits."

Woori Bank, which started monthly and branch-level household loan management from last month, already has branches where loan limits are full. Additional limit allocations at the head office level for real borrowers are also underway.

A Woori Bank branch employee hinted, "It has become important for those planning to take out loans by the end of the year to submit applications in advance. Some branches that have exhausted their limits not only in October but also in November and December have applied for additional limit allocations." He added, "For real borrowers who need Jeonse deposit loans or mortgage loans, approval is granted in the order of loan application, so it is advantageous to apply for loans in advance considering the limit exhaustion situation."

Monthly and branch-level loan limit management is a last-resort measure to prevent a complete halt of household loans, so it is highly likely that other commercial banks, whose loan growth rates are approaching dangerous levels, will follow suit. Financial authorities plan to manage this year’s household loan growth rate at around 5-6%. After NH Nonghyup Bank’s growth rate exceeded 7%, Kookmin and Hana Banks recently surpassed 5%. Woori and Shinhan Banks are rapidly increasing at around 4% and 3%, respectively.

An official from a bank said, "Many banks are strengthening loan management responses, such as Hana Bank temporarily stopping new applications for refinancing of non-face-to-face products like ‘Hana One Q Credit Loan’ and ‘Hana One Q Apartment Loan.’ It is expected that more banks will switch to monthly and branch-level loan management systems by the end of the year."

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