Despite an increase in mortgage loans, household loans decrease due to repayment of unsecured loans
Loans repaid with holiday and performance bonuses… “Household loan slowdown expected to continue.”,
Last month, a notice of mortgage loan interest rates was posted at a bank in Seoul. (File photo) / News1 © News1 Jang Soo-young,
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, ‘(Seoul=News1) Reporter Kim Hyeji = Last month, household loans from domestic banks decreased slightly for the second consecutive month. Despite the increased scale of mortgage loans, households repaid high-interest unsecured loans with holiday and performance bonuses received at the beginning of the year.’,
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, ‘The household loan slowdown is expected to continue.’,
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, ‘According to the financial market trends for January 2025 released by the Bank of Korea on the 12th, the outstanding balance of household loans at domestic deposit banks at the end of last month was 1,140.5 trillion won, a decrease of 5 trillion won from the previous month.’,
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, ‘It marked the second consecutive month of decline, following a reduction of 0.4 trillion won the previous month.’,
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, ‘Specifically, while bank mortgage loans increased by 1.7 trillion won, up from 0.8 trillion won the previous month, other loans, including unsecured loans, rapidly decreased by 2.1 trillion won (down from 1.1 trillion won the previous month), leading to an overall decline in household loans.’,
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, ‘Park Min-cheol, head of the Market Coordination Team at the Bank of Korea’s Financial Market Bureau, stated, “The handling of household loans by banks resumed at the beginning of the year, but mortgage loans continued to grow at a slow rate due to a slowdown in housing transactions,” adding, “Other loans saw an increased decline due to the influx of holiday and performance bonuses.”‘,
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, ‘The increase in mortgage loans has been ongoing for 23 consecutive months since February 2023 (-0.3 trillion won).’,
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, ‘The scale of the decrease in household and other loans in January was the largest in ten months since March of last year (each -1.7 trillion, -2.2 trillion won).’,
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, ‘The Bank of Korea has judged that the recent growth in household loans appears to be low.’,
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, ‘Park explained, “While it is true that the increase in household loans has slightly expanded, overall loans in the financial sector, including non-bank institutions, have shifted to a slight decrease.”‘,
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, ‘He continued, “Housing-related loans continue to show a generally low growth rate,” noting, “Last year, mortgage loans increased by about 58 trillion won across the entire financial sector, but this time the growth scale is around 3 trillion won, significantly lower than last year’s average.”‘,
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, ‘He also added that the decline in household loans this January was significantly affected by the overlap in the timing of performance and holiday bonus payments this year, which was different from last year.’,
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, ‘In forecasting the future trend of household loans, he said, “In February, the overall household loans are expected to increase again as the decrease in other loans diminishes due to the early receipt of holiday bonuses,” adding, “However, with housing prices turning downward and transaction volumes continuing to decrease, the overall slowdown in household loans in the financial sector is expected to persist.”‘,
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, ‘The Bank of Korea is closely monitoring the trend of housing transaction volumes.’,
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, ‘Park emphasized, “Recently, housing transaction volumes are less than half of those in July-August of last year,” saying, “Housing transaction volumes are the most important factor in assessing the general trend of household loans.” He further added, “Considering this, household loans centered around housing-related loans are expected to continue their slowdown for the time being.”\n’