Active-duty soldiers in South Korea have been found to accumulate loans from private lenders at exorbitant interest rates ranging from 17.9% to 20%, amassing a total debt of 24.2 billion won. This amount represents over half of all military-related loans processed by private lending companies, raising concerns about the vulnerability of these soldiers, primarily from economically disadvantaged backgrounds, to high-interest borrowing. As of the end of last year, total military personnel loans stood at 44.4 billion won, with soldiers accounting for 54.5% and professional soldiers for 35.7% of these loans.

The investigation, conducted by the Financial Supervisory Service, revealed that among the top 30 lending companies, 25 offer loans to military personnel, with various companies targeting either active-duty soldiers or professional servicemen. Loan limits typically range from 10 to 15 million won, and soldiers are accessing these loans through promotional campaigns that exploit terms such as 'Loyalty Theory,' 'Sergeant Theory,' and 'Active-duty Soldier Loans.' This highlights a targeted marketing strategy that potentially exploits their circumstances, facilitating easy access to high-cost credit.

Moreover, the issue of soldier indebtedness is on the rise, with debt restructuring amounts increasing significantly from 5.6 billion won in 2021 to an anticipated 10.2 billion won by 2025. In response to these alarming trends, the Financial Supervisory Service has committed to guide lending companies to prevent excessive marketing aimed at active soldiers and to ensure compliance with regulations that prohibit excessive lending and misleading advertisements. Additionally, there is a push for enhanced financial education to provide soldiers with the skills necessary for sound financial decision-making from their initial enlistment through to their discharge, focusing on managing risks and planning for economic independence.