Commercial Banks Hit the Brakes on Household Loans... Loan Officers Suspend Mortgage Applications

Following Shinhan Bank, Woori Bank, IBK, and NongHyup Bank Also Join

Major commercial banks are rushing to suspend the acceptance of mortgage loan applications through loan agents in order to manage the total volume of household loans.

According to the financial sector on the 24th, Shinhan Bank has indefinitely suspended the acceptance of mortgage loan applications through loan agents in the metropolitan area since the 10th.

Loan agents refer to loan brokerage corporations and loan consultants who sign contracts with banks and perform entrusted tasks such as loan application consultation, application receipt, and delivery. A bank official said, "This is a desperate measure to ease the steep increase in household debt," adding, "Loans through bank counters are still possible."

ATMs of major commercial banks are installed on a street in downtown Seoul. Photo by Yongjun Cho jun21@

Woori Bank has decided not to sell products such as mortgage loans, jeonse deposit loans, and move-in deposit loans through loan agents nationwide from mid-next month until the end of the year. On the 1st, Woori Bank announced that it would manage by assigning monthly loan handling limits to each brokerage corporation to which loan agents belong.

NH Nonghyup Bank has exhausted the loan handling limits for this month for all three loan brokerage corporations it deals with. It will be difficult to obtain loans through loan agents until the end of next month. IBK Industrial Bank will also temporarily suspend loan acquisition through loan agents starting from the 2nd of next month.

The reason banks are collectively suspending loans through loan agents is analyzed to be because loans through these agents have a significant impact on the increase in household loans.