South Korean Household Bank Loans Increase for Tenth Consecutive Month

SEOUL - In January, banks in South Korea reported a rise in household loans for the tenth month in a row, driven primarily by an increase in home-backed loans, amidst concerns over the financial stability of highly indebted households in Asia's fourth-largest economy.

According to Yonhap News Agency, the total outstanding household loans reached 1,098.4 trillion won (US$820 billion) at the end of January, a 3.4 trillion won increase from the previous month.

The growth in January's home-backed loans, which rose by 4.9 trillion won to 85.53 trillion won, slightly decelerated from the prior month's gain, while unsecured and other loan categories saw a decrease of 1.5 trillion won, totaling 241.9 trillion won. Policymakers have expressed concerns over the rising household debt levels, which could further dampen private spending. The central bank's continued high-interest rates, aimed at curbing inflation, contribute to the high borrowing costs faced by consumers. In a move to stabilize the economy, the BOK has maintained its key interest rate at 3.5 percent since February of the previous year, following a series of rate hikes.

Additionally, bank loans to companies also saw an increase in January, marking a shift from the decline observed in the previous month.

scroll to top