"Can't Even Repay 1 Million Won"… 25% Increase in Credit Caution 20s Over 3 Years

66,000 Credit Caution Holders in Their 20s

In an era of high interest rates and high inflation, the debt burden on young people in their 20s is increasing day by day. In particular, most cases involve individuals becoming credit delinquents due to failure to repay small loans of less than 10 million won.

According to data on the status of credit delinquents by industry sector over the past three years, submitted by the Financial Supervisory Service to Rep. Lee Kang-il of the Democratic Party of Korea on the 9th, as of the end of July, 65,887 people in their 20s were registered as credit delinquents with the Korea Credit Information Services (excluding duplicates). This represents a sharp increase of 25.3% compared to 52,580 at the end of 2021.

Credit delinquents are registered with the Credit Information Services if the loan maturity is overdue by more than three months or the delinquency period exceeds six months. After registration, they face various financial disadvantages such as suspension of personal card use, restrictions on loan usage, and credit rating downgrades.

Most delinquent young people in their 20s are small debtors. As of the end of July, 73,379 people in their 20s had short-term delinquency information registered with credit rating agencies (excluding card payment delinquencies), of which 64,624 (88.1%) had delinquent amounts of '10 million won or less.' This means that the vast majority, about 90%, of young debtors who became credit delinquents failed to repay loans ranging from several hundred thousand to several million won.

Among the registered credit delinquents in their 20s, about half, 33,610 people, were those who failed to repay loans received from banks. This was followed by savings banks (22,356 people), and credit specialized financial companies such as card companies and capital companies (10,683 people).

Rep. Lee said, "As low growth continues and new jobs for people in their 20s decrease, the difficulties in young people's livelihoods have manifested as small delinquency." He suggested, "Resolving small delinquency among the youth through financial measures such as debt adjustment is not enough; macro-level youth policies such as job creation and social policies must be implemented."