[Reporter’s Notebook] Are Loans Now First-Come, First-Served?

[Asia Economy Reporter Park Sunmi]“It seems that now loans can only be obtained through lotteries or on a first-come, first-served basis.”

These days, without bank debt, not only is it difficult to increase assets, but securing a safe living environment has also become nearly impossible. Borrowing money is becoming as difficult as "catching stars in the sky." Given the current atmosphere, there are even talks that if you fall out of the first-come, first-served queue by the end of the year, getting a loan will be impossible.

At the beginning of this year, financial authorities instructed banks to manage the household loan growth rate at around 5-6% annually. The market interpreted this as a signal to tighten household loans. It was predicted that it would become increasingly difficult to take on debt beyond one’s income level for investment, as in the past.

However, instead of slowing down, the pace of bank loan growth actually increased. Since the authorities’ target was set on an annual basis, banks did not feel the need to proactively manage household loans early on. Given that loan performance is traditionally important in the early stages, it was a foreseeable scenario that banks’ loan management intensity would show a "high-low" pattern.

The consumers bore the brunt of this. Although three months remain until the end of the year, the loan limits of the four major commercial banks have nearly been reached. Following NH Nonghyup Bank, which exceeded a 7% loan growth rate, KB Kookmin Bank and Hana Bank, which are likely to surpass the 5% mark, have started tightening additional loans. Shinhan Bank and Woori Bank, which still have some leeway at 2-3%, are also expected to join the tightening measures in a chain reaction to prevent a "balloon effect." If you have funding plans, it has become increasingly important to submit loan applications earlier as the year-end approaches.

Even if you are lucky enough to get into the first-come, first-served queue, it is difficult to receive a satisfactory loan limit. KB Kookmin Bank adjusted the collateral criteria for move-in balance loans within group loans from the previous KB market price or appraisal value to the lowest amount among the sale price, KB market price, and appraisal value. This change has created funding gaps for those planning to move into new apartments. There is growing demand for policy improvements to prevent pre-sale applicants from suffering further damage due to the sudden change in conditions.

No matter how good a solution is to save South Korea from a mountain of debt, if policies and conditions change without preparation time, innocent victims are bound to emerge. As bank loan management tightens toward the end of the year, careful policy adjustments are needed to ensure that the tightening of first-come, first-served loans does not result in harm to genuine borrowers who miss out.

This content was produced with the assistance of AI translation services.