Personal Loans Also Revived... Growth Trend Resumes After 1 Year and 7 Months

Housing Prices and Stock Market Recovery
Speed of Household Loan Growth Accelerates
Credit Loans Also Turn to Increasing Trend in July

A customer is receiving consultation at a bank loan consultation desk. Photo by Jinhyung Kang aymsdream@

Credit loans, which had been declining since the year before last, are showing signs of revival. As the stock market recovers and home purchases increase, credit loans have also risen accordingly. With both mortgage loans and credit loans trending upward, household loans are increasing at a faster pace.

According to the five major banks (KB Kookmin, Shinhan, Hana, Woori, NH Nonghyup) as of the 18th, the outstanding balance of personal credit loans was recorded at 109.5057 trillion won. This is an increase of 576.8 billion won compared to the end of June (108.9289 trillion won). The upward trend in credit loans is the first in 1 year and 7 months. The size of credit loans, which was 141.1338 trillion won in November 2021, began to decline from December of that year. Due to high interest rates, the balance decreased every month until last month.

An official from a commercial bank said, "Last year, the interest rates on credit loans at commercial banks rose to 6-7%, and as the stock and virtual asset markets declined, only those repaying loans increased while borrowers decreased, causing the credit loan balance to continuously retreat." He added, "The recent increase in credit loans starting this month seems to be due to the improvement in the stock market and the rise in homebuyers, which has led to increased demand for funds."

Overall household loans, which turned to increase from May, are growing even faster. The outstanding balance of household loans at the five major banks increased by 143.1 billion won during May (from 677.4691 trillion won to 677.6122 trillion won). The balance at the end of June was 678.2454 trillion won, with an increase of 633.2 billion won in June. This trend continued, and as of July 18, the balance reached 679.5051 trillion won, an increase of 1.2597 trillion won compared to the end of June.

The upward trend in mortgage loans also remained steady. As of July 18, the balance was 511.9844 trillion won, 583.7 billion won more than the end of June (511.4007 trillion won). Mortgage loans led the increase in household loans in May and June.

KB Financial Group Management Research Institute stated, "In June, the nationwide housing sale price fell by 0.25%, reducing the decline by more than half compared to the previous month (-0.58%)." They added, "The decline in housing sale prices slowed significantly in most regions nationwide, and especially the top 50 apartments by total market value have shown an upward trend for two consecutive months." Furthermore, "Housing transaction volume in May recorded the highest since May of last year," and "As concerns over a sharp price drop have eased, expectations for rising sale prices are spreading."

Since the KOSPI recovered to the 2600 level recently, the previously sluggish trading volume has also increased. According to the Korea Exchange, the combined daily average trading volume of KOSPI and KOSDAQ in July exceeded 20 trillion won. Starting at 13 trillion won in January, it rose to 26 trillion won in April amid a strong stock market at the beginning of the year. After a correction, it fell to 18 trillion won in May but is now showing signs of renewed investor sentiment.

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