South Korea household loans hit lowest level in 13 quarters

New household loans in South Korea reached their lowest level in 13 quarters during the second quarter of 2024. According to data from the Bank of Korea, the average new loan amount per borrower fell to 34.14 million won, a decrease of 1.28 million won from the previous quarter.

Mortgage loans saw a particularly sharp decline, with the average new amount per borrower dropping by 21.1 million won compared to the previous quarter. This represents the largest single-quarter decrease since statistics began being compiled in 2013. The decline was most pronounced among borrowers in their 30s and 40s, while the 20s age group saw a slight increase in new mortgage amounts, likely due to a higher proportion of first-time homebuyers.

Despite the drop in new lending, the average outstanding household debt balance per borrower rose to 97.9 million won, an increase of 500,000 won from the previous quarter. This trend is attributed to a slowdown in loan repayments and tightened lending management by financial institutions, which reduced the scale of additional loans for existing borrowers but did not lead to a reduction in total debt balances.