[Report] "How much is your credit limit?" Countdown to credit loan restrictions... Signs of a last-minute loan rush crisis

Moves to Slow Down Commercial Bank Loans... Visiting the Branch
Credit Loans Surge by 700 Billion Won in Two Days

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[Asia Economy Reporter Jo Gang-wook] "I heard that the credit loan limit is being reduced. How much will it be cut? I was planning to take out a loan next month for the apartment's interim payment, so I think I need to get it quickly."

"How will the interest rates be adjusted? I checked through the credit loan application (app), but it only shows errors. If I visit the branch now, will I be able to get a loan?"

On the 16th, inquiries about credit loan interest rate adjustments and limit reductions flooded commercial bank branches. As efforts to curb the rapid increase in credit loans began in earnest, those who were in the middle of or preparing for real estate investments faced disruptions in their plans. There were even complaints that if they couldn't get credit loans, it would be difficult to pay the existing apartment interim payments or remaining balances. Among office workers, there is a strong movement to "just get it first" and catch the 'last train.'

"Just get it first" - Flood of limit inquiries

An official from Bank A's Yeouido branch said, "In the past few days, we have been flooded with phone inquiries about when the loan interest rates will rise and how the limits will be adjusted," adding, "Although the number of customers coming directly to the counter to get loans hasn't increased significantly, we have become busy handling phone inquiries."

Also, an official from Bank B's Gwanghwamun branch said, "One customer had consulted about taking out a loan in October or November and asked if they could get the loan under the existing conditions," adding, "Many phone inquiries came from people who were considering taking out loans but were worried about possible impacts due to tightening loan conditions."

Although inquiries have surged, there are also remarks that full frontline counter responses have not yet begun. It is still the beginning, and the next week is expected to be a critical period.

An official from Bank C said, "At the head office level, we are collecting inquiries received at the counters to understand which issues are most common and to set directions," adding, "It will take some time until the head office creates and distributes manuals regarding loan criteria such as interest rates and limits."

Inquiries from high-income earners also continued. Bank D reported that yesterday, inquiries about opening overdraft accounts and increasing limits from professionals such as doctors, lawyers, and accountants were nonstop at their branches.

Interest rates that won't come again: "Not taking it is foolish"

On portal site communities, voices saying "Even if you don't have an immediate need, you should get it first" are growing louder. There are even remarks like "Not taking it is foolish." A netizen who identified as a 30-something office worker said, "The government says they will regulate again, but I feel this interest rate will never come back," adding, "In two days, I might earn more than a year's worth of interest in the stock market, so I'm debating whether to take out a loan."

In fact, a 'panic loan' occurred due to regulatory concerns. Credit loans, which had increased by 1.1 trillion won by the 10th of this month causing shock, grew by more than 700 billion won in just two days (14th-15th) at major commercial banks. While 'debt investment' (bit-tu), borrowing to invest in stocks, and 'all-in borrowing' (yeong-kkeul), borrowing every possible asset to buy real estate, continue, even those who do not necessarily need loans are applying, thinking "better to get it first."

Concerns over harm to genuine borrowers due to high-income earner regulations

Suspicion about the financial authorities' 'targeted regulation' is growing. There is concern that blocking the money flow for ordinary people might push them to higher-interest secondary financial institutions or harm small business owners and self-employed people who have been using credit loans as living expenses during the prolonged COVID-19 pandemic. Another netizen expressed frustration, saying, "They don't even provide low-interest COVID loans to office workers and now want to block credit loans too," adding, "Ordinary office workers need loans to buy homes, so what are we supposed to do?"

There were also worries from others saying, "Previously, mortgage loans were blocked in primary financial institutions, so people had no choice but to go to secondary financial institutions. If credit loans are blocked again in primary financial institutions, we will have to borrow at slightly higher rates in secondary financial institutions."

The banking sector expects the 'last train' rush for credit loans to intensify. An official from a commercial bank said, "The financial authorities have currently sent a 'signal' to reduce credit loans for high-income earners first, but this is due to the 'balloon effect' caused by mortgage loan regulations, so more direct regulations are expected," adding, "In this process, there is a high possibility that genuine borrowers who need living expenses may suffer unintended damage."