"Unable to Repay 5 Million Won"... 4 out of 10 Debt Defaulters in Their 20s Are Small Loan Borrowers

Average Debt Amount of Defaulting Debtors in Their 20s: 15.8 Million KRW
Increase in Secondary Financial Institution Loans... Deterioration in Loan Quality

[Image source=Yonhap News]

[Asia Economy Reporter Buaeri] It has been revealed that there are 84,000 financial debt defaulters in their 20s who failed to repay loans from financial institutions on time. Four out of ten of them became defaulters by failing to repay loans of 5 million won or less.

According to the 'Status of Financial Debt Defaulters' data submitted by the Credit Information Service to Jin Sun-mi, a member of the Democratic Party of Korea, on the 4th, the average registered amount (total principal and interest of overdue loans) of debt defaulters in their 20s as of the end of June was 15.8 million won.

Looking at the registered amount brackets of debt defaulters in their 20s, those with loans of 5 million won or less numbered about 35,200 (41.8%), the largest group.

Those with loans exceeding 5 million won but not exceeding 10 million won were about 17,900 (21.2%), the second largest group. Borrowers with loans exceeding 300 million won were only about 200, accounting for just 0.2% of the total.

The total household loans of people in their 20s also showed an upward trend again. In particular, the total loans from the secondary financial sector increased significantly more than those from banks, worsening the quality of loans.

The total household loans of people in their 20s recorded 95.9503 trillion won as of June. This is a 0.6% increase compared to March (95.0665 trillion won).

Especially, the total household loans from the secondary financial sector for people in their 20s at the end of June increased by 3.1% compared to the end of March, reaching 27.669 trillion won.

Savings banks, insurance, and mutual finance showed particularly steep increases. At the end of December last year, the total household loans from savings banks increased by 47% compared to the end of December 2019, reaching 4.2627 trillion won. Insurance and mutual finance increased by 24.3% and 23.6%, respectively, during the same period, reaching 1.2813 trillion won and 8.6164 trillion won.

Representative Jin pointed out, "To prevent young people from becoming debt defaulters by failing to repay small amounts of 5 million won or less, it is necessary to improve young people's repayment ability by providing economic activity opportunities through unemployment assistance and other measures."

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