"Let's Pay Off Debt First" Five Major Banks' Household Loans Drop 19 Trillion Won in One Year

[Image source=Yonhap News]

[Asia Economy Reporter Bu Aeri] The decline in household loans at major commercial banks has continued for 13 consecutive months. As more people, known as 'interest dieters,' repay loans using savings, deposits, or accumulated lump sums due to the burden of loan interest, the outstanding household loan balance has decreased by 19 trillion KRW over the past year.

According to the financial sector on the 4th, the outstanding household loan balance at the five major banks?KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup?stood at 688.6478 trillion KRW last month, down 3.8857 trillion KRW from the previous month. Compared to January last year (707.6895 trillion KRW), this represents a decrease of 19.0417 trillion KRW.

Breaking down by loan type, mortgage loans slightly increased by 21.61 billion KRW to 513.3577 trillion KRW from the previous month, but credit loan balances decreased by 3.3516 trillion KRW to 115.6247 trillion KRW, leading to an overall decline in household loans. The outstanding household credit loan balance decreased by 21.4174 trillion KRW compared to January last year (137.0421 trillion KRW).

A representative from a commercial bank said, "The recently lowered loan interest rates apply only to new loans, and existing borrowers are more often linked to the base rate. Since there are factors for future rate increases, there is a prevailing sentiment that reducing interest expenses is beneficial for households in the long term."

As deposit interest rates fall, deposit balances are also declining. Last month, the total deposit balance at the five major banks was recorded at 1,870.0581 trillion KRW, down 7.3862 trillion KRW from the previous month (1,877.4443 trillion KRW).

As of the end of last month, the five major banks' time deposit balance decreased by 6.1866 trillion KRW from the previous month to 822.25 trillion KRW. The balance of regular savings deposits recorded 3.943 billion KRW less than the previous month, totaling 36.8367 trillion KRW.