Household Loans Increase by 5.4 Trillion Won in July... Four Consecutive Months of Growth

In July, household loans across all financial sectors showed an increase for the fourth consecutive month.

According to the Financial Services Commission on the 9th, household loans across all financial sectors increased by 5.4 trillion KRW last month. Although this is a 0.8% decrease compared to the previous year, the monthly increase has been growing since April (200 billion KRW), May (2.8 trillion KRW), and June (3.5 trillion KRW).

Looking at the loan categories, the increase in mortgage loans slowed somewhat, but the decrease in other loans narrowed. In the case of mortgage loans, loans from the secondary financial sector decreased by 400 billion KRW, but loans from banks increased by 6 trillion KRW, resulting in a total increase of 5.6 trillion KRW. Other loans decreased by about 200 billion KRW, with both banks (100 billion KRW decrease) and the secondary financial sector (200 billion KRW decrease) showing declines.

By financial sector, household loans in banks increased, while those in the secondary financial sector decreased. Household loans in banks increased by 6 trillion KRW, maintaining an upward trend for four consecutive months. Bank mortgage loans decreased in jeonse loans (20 billion KRW decrease) and group loans (100 billion KRW decrease), but increased in general individual mortgage loans (3.9 trillion KRW increase) and policy mortgages (2.4 trillion KRW increase), resulting in a total increase of 6 trillion KRW. Other loans decreased by 10 billion KRW due to a base effect from write-offs during the June settlement and a shift to an increase in credit loans, slowing the rate of decline.

In the secondary financial sector, mutual finance decreased by 1.6 trillion KRW, but insurance (500 billion KRW increase), savings banks (100 billion KRW increase), and specialized credit finance companies (500 billion KRW increase) contributed to a slowdown in the decrease, resulting in a total reduction of 600 billion KRW. The slowdown in the decrease in the secondary financial sector was mainly due to a combination of the June write-off effect and temporary funding demand such as public offering subscriptions, which led to an increase in insurance contract loans and credit card loans from specialized credit finance companies, thereby reducing the decline in other loans.

A financial authority official stated, “As household loans across all financial sectors have continued to increase since April due to the recovery in housing transaction volumes, we will closely monitor the increase in mortgage and credit loans by financial sector and prepare proactive measures to stably manage household loans in the second half of the year if necessary.”

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