6 out of 10 Newly Brewed This Year Are 'Youth Under Their 30s'

Average Debt of New Borrowers Under 30 in Q3 Reaches 43.55 Million KRW... 20% Increase YoY

Apartment and the Young Generation
[Photo by Yonhap News]

[Asia Economy Reporter Koo Eun-mo] The proportion of young people in their 20s and 30s among those who have newly taken out loans this year has increased. In particular, the average loan amount of new borrowers in this age group rose by nearly 20% this year, recording the highest growth rate among all age groups.

According to the Bank of Korea's household debt database on the 26th, the proportion of new borrowers among all borrowers up to the third quarter of this year was 6.7%, down from 7.1% last year.

However, in terms of the amount of debt held by new borrowers, it accounted for 3.7% of the total, up 0.4 percentage points from 3.3% last year. This is because the average loan amount of new borrowers increased by 17.3%, from 39.09 million KRW in 2019 to 45.84 million KRW this year.

Looking at new borrowers by age group, those aged 30 and under accounted for 58.4% of all new borrowers up to the third quarter of this year (based on the number of borrowers). This proportion has been increasing every year since 49.5% in 2017.

On the other hand, the proportion of new borrowers in their 40s decreased from 19.4% in 2017 to 14.9% this year, and those in their 50s (16.9% → 13.8%) and 60s and above (14.2% → 12.9%) also declined. The trend was similar when based on the amount of debt held.

The debt amount of new borrowers aged 30 and under accounted for 55.3% of the total this year, up from 52.4% last year, while the other age groups all decreased.

The debt growth rate of new borrowers aged 30 and under surpassed all other age groups. As of the third quarter of this year, their average debt holding was 43.55 million KRW, which was lower than other age groups, but compared to the average debt of new borrowers aged 30 and under at the end of last year (36.32 million KRW), it increased by 19.9%. This growth rate exceeds that of those in their 40s (53.93 million KRW, +16.9%), 50s (46.77 million KRW, +14.4%), and 60s and above (46.01 million KRW, +12.9%).

The Bank of Korea explained, "Young people often take out their first loans due to employment and other reasons, but recently, as their home purchases have increased, the loan amounts appear to have expanded."