Ruling Party and Government Temporarily Ease Annual Income Limit for Credit Loans in Cases of 'Funerals and Weddings'

[Asia Economy Reporters Oh Ju-yeon and Jeon Jin-young] The ruling party and the government have decided to temporarily ease the credit loan limit, which is normally set at '1 times annual income,' only for unavoidable reasons such as funerals or weddings.

Financial Services Commission Chairman Ko Seung-beom attended the "October Household Debt Management Measures Party-Government Consultation" held at the National Assembly on the 25th and was talking with Kim Byung-wook, the Democratic Party's Policy Committee Secretary, during the meeting. Photo by Yoon Dong-joo doso7@

On the 25th, Kim Byung-wook, the ruling party's secretary of the National Assembly's Political Affairs Committee, met with reporters after the 'Household Debt Measures Political Affairs Committee Party-Government Meeting' at the National Assembly and said, "We have decided to temporarily allow exceptions for unavoidable financial needs such as funerals and weddings when managing the credit loan limit based on annual income." He explained, "This is one of the measures to protect genuine borrowers," adding, "Next year, we will continue to expand financial support for low-income and vulnerable groups through products such as low-income financial products and mid-interest loans."

Kim also said, "The ruling party and the government reached a consensus on the need to prepare for risks related to household debt," adding, "However, we agreed to ensure that genuine borrowers do not face difficulties such as suspension of jeonse (key money deposit) loans or balance payments during the household debt management process." At the meeting, in addition to exceptions to credit loan regulations, measures were discussed to exclude jeonse loans from the fourth-quarter total volume management to ensure sufficient funding supply and to effectively implement these at financial institutions' on-site counters. Furthermore, the financial authorities agreed to carefully inspect move-in projects within this year to prevent any difficulties related to balance payment loans.

The strengthening of DSR (Debt Service Ratio) regulations was not discussed at this meeting. Regarding the proposal to lower the DSR for secondary financial institutions to 40%, the same as banks, Kim said, "That was not discussed today," and added, "The government side will make a statement regarding the DSR issue." Based on the discussions, the government will announce the final household debt measures on the 26th.