Hundreds of Billions Over the Weekend... Surge in Last-Minute 'Yeongkkeul' Credit Loans

Weekend Personal Loans Surge 3 to 4 Times
Delays Occur Due to Kakao Bank Access Overload

[Image source=Yonhap News]

[Asia Economy Reporter Jo Gang-wook] As the implementation of credit loan regulations for high-income earners is scheduled for the 30th, the number of people trying to secure credit loans in advance is surging at banks' online counters. Over the past weekend, hundreds of billions of won in credit loans were made through online non-face-to-face methods.

According to the financial sector on the 17th, online non-face-to-face credit loans over the weekend of the 14th and 15th increased about 3 to 4 times compared to usual.

In the case of Bank A, 719 cases amounting to 30.4 billion won in credit loans were made online in just two days. This exceeds four times the scale of about 7 billion won (348 cases) from the weekend just one week prior. During the same period, Bank B's credit loans also reached 6.7 billion won (234 cases), about three times the previous weekend's 2.7 billion won (155 cases).

At the internet bank KakaoBank, there was even a delay in access as credit loan applications temporarily surged on the 15th and 16th.

On the 13th, the Financial Services Commission and the Financial Supervisory Service jointly announced household loan management measures aimed at strengthening the total debt service ratio (DSR) regulations for high-income earners to block high-value credit loans. This is a 'pinpoint regulation' measure to prevent money from flowing into the real estate market and other investment purposes.

If a high-income earner with an annual salary of 80 million won or more takes out a credit loan of 100 million won or more, DSR regulations (40% for banks, 60% for non-banks) will be applied on an individual basis. If they take out a credit loan exceeding 100 million won and purchase a house in a regulated area within one year, the loan will be recalled within two weeks. This regulation will take effect from the 30th.

On the first business day after the announcement of this pinpoint regulation on credit loans for high-income earners, the 16th, not only credit loan applications but also related inquiries at bank branches surged.

An employee at a commercial bank branch said, "Most high-income earners already have credit loans, so there are many inquiries from existing credit loan borrowers," adding, "Borrowers approaching maturity mainly ask whether they can extend the maturity and whether their credit limits will be reduced after the 30th."

There was also controversy that this regulation would make it more difficult for the homeless to own homes. Regarding this, the Financial Services Commission stated, "This measure was prepared under the fundamental principle of protecting low-income earners and actual demanders as much as possible," and dismissed concerns by saying, "It strengthens banks' own credit loan management efforts within the scope that does not affect low-income earners and small business owners."

Furthermore, it added that for homeless individuals, mortgage loans are possible when purchasing a house priced at 900 million won or less, and usually loans up to 40-50% of the loan-to-value ratio (LTV) are available. In such cases, if credit loans are used for amounts under 100 million won, they are not affected by this measure.