New household loans per capita have declined significantly, particularly among individuals in their 30s and in the capital region, according to recent data from the Bank of Korea.
The Bank of Korea's analysis for the fourth quarter of the previous year reveals a substantial reduction in new household loans per capita, with the average amount falling to 34.43 million KRW, a decrease of 4.09 million KRW compared to the previous quarter. Notably, borrowers in their 30s experienced the largest reduction, with their new loan amounts dropping by 15.2% to 45.47 million KRW. Additionally, the capital region saw a decrease of 17.8%, highlighting regional variations in borrowing patterns.
The report indicates that the decline in household loans is evident across all age groups, with individuals in their 40s also seeing significant drops. Specifically, the average new loan amount for this age group's borrowers decreased by 11% to 38.57 million KRW. In terms of housing loans, there was a reduction from 227.07 million KRW to 212.86 million KRW, reflecting broader economic trends influencing lending practices and borrower behavior in these demographic segments.
Moreover, while bank loans have decreased significantly, there was a slight increase in loans from non-bank financial institutions. The overall household debt balance at the year's end was recorded at 97.39 million KRW per borrower, which showed a minor increase from the previous quarter, indicating ongoing concerns regarding household debt levels, particularly among those in their 40s as they continue to comprise a substantial share of the total debt owed in the region, which is predominantly located in the capital area.
