"Youth Driven into Debt"… Three Years of COVID-19, Loans Increased Most Among 2030 Generation

Loans from Banks and Secondary Financial Institutions for Those Under 30 Surge 27.4%

It has been confirmed that the debt of the 2030 generation increased the most over the three years since the start of COVID-19.

As rent for one-room apartments near universities rises amid high inflation, more students are seeking more affordable housing options such as boarding houses and dormitories. On the 24th, a flyer related to boarding houses was posted on a community bulletin board near Chung-Ang University in Dongjak-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

According to the 'Household Loan Status' data submitted by the Bank of Korea to Yang Kyung-sook, a member of the National Assembly's Planning and Finance Committee from the Democratic Party of Korea, as of the end of the fourth quarter last year, the number of household loan borrowers in the domestic banking sector was 14.9 million, and their total loan balance was found to be 902.2 trillion won.

Considering that the number of household loan borrowers in the banking sector was 12.7 million and the loan balance was 766.8 trillion won in the fourth quarter of 2019, just before the COVID-19 outbreak, the number of borrowers increased by 17.3% and the balance by 17.7% over three years.

The household loan balance in the 'secondary financial sector' such as savings banks and mutual finance also increased by 8.7%, from 468.5 trillion won in the fourth quarter of 2019 to 509.1 trillion won in the fourth quarter of last year.

By borrower age group, the surge in loans among those aged 30 and under was particularly notable. The loan balance for those aged 30 and under was recorded at 514.5 trillion won last year’s fourth quarter, combining 354.8 trillion won in the banking sector and 159.7 trillion won in the secondary financial sector. This is a 27.4% increase compared to 404 trillion won (278.1 trillion won in banks and 125.9 trillion won in the secondary financial sector) in the fourth quarter of 2019, three years ago.

The loan growth rate for those aged 30 and under was higher than other age groups such as those aged 60 and over (25.5%), 40s (9.2%), and 50s (2.3%). The increase in loan amount over three years was also highest for those aged 30 and under (110.5 trillion won).

The group with the largest increase in average loan amount per borrower was also the 2030 generation. The average loan amount per borrower aged 30 and under rose by 18.4%, from 59.806 million won in the fourth quarter of 2019 to 80.818 million won in the fourth quarter of 2022. This was followed by 40s with 10.4%, 50s with 3.5%, and 60s with 2.1%.

Concerns are also rising as the delinquency rates of vulnerable borrowers such as young people in their 20s and 30s and low-income groups have slightly increased. The delinquency rate for household loans among those aged 30 and under, combining banks and secondary financial sectors, was 0.5% in the fourth quarter of last year, up 0.1 percentage points from 0.4% maintained since the fourth quarter of 2020. Delinquency rates for those in their 40s (0.6%), 50s (0.6%), and 60 and over (0.7%) also rose simultaneously at the end of last year.

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