Delinquency Rate for Lending Companies Remains at 12.1%... Outstanding Loans Up 1%

Financial Supervisory Service Releases First Half Survey Results
Number of Lending Company Users Rises by 1.3%
"Thorough Monitoring of Credit Supply to Low-Credit Borrowers"

The delinquency rate of major large-scale lending companies, which reached a record high in the first half of last year, remained at around 12% in the second half of last year and continued at this level in the first half of this year. Both the outstanding loan balance and the number of users increased. Financial supervisory authorities announced plans to closely monitor the status of credit supply to low-credit borrowers.

According to the "2025 First Half Lending Industry Survey Results" released by the Financial Supervisory Service on December 30, the delinquency rate (over 30 days past due on principal and interest) for major lending companies with assets of 10 billion won or more stood at 12.1% as of the end of June, unchanged from the end of last year.

The delinquency rate for lending companies rose from 6.1% at the end of 2021 to 7.3% at the end of 2022, 12.6% at the end of 2023, and 13.1% at the end of June last year. The figure at the end of June last year was the highest since statistics began in 2010. After falling to 12.1% at the end of last year, it remained at this level in the first half of this year.

The delinquency rate for secured loans was 16.1%, up 0.1 percentage point from 16% at the end of last year. The delinquency rate for unsecured loans was 8.4%, also up 0.1 percentage point over the same period.

The average loan interest rate was 13.9% per annum, the same as at the end of last year.

The average interest rate for personal unsecured loans by major lending companies was 18.1%, maintaining the same level as at the end of last year.

The average loan interest rate is generally lower than the personal unsecured loan rate because it includes corporate credit loans and secured loans, which typically have lower interest rates.

The outstanding loan balance stood at 12.4553 trillion won, up 1% (120.5 billion won) from 12.3348 trillion won at the end of last year.

An official from the Financial Supervisory Service explained, "The increase in unsecured loans by major lending companies, which rose by 200.4 billion won compared to the end of last year due to a decline in funding rates, had an impact."

Unsecured loans accounted for 5.0861 trillion won (40.8% of the total), while secured loans accounted for 7.3692 trillion won (59.2%).

The number of lending company users also increased.

The number of users of lending companies, which reached 989,000 at the end of 2022, decreased to 728,000 at the end of 2023, 714,000 at the end of June last year, and 708,000 at the end of last year, but increased to 717,000 at the end of the first half of this year.

The increase in the number of users of personal unsecured loans at major lending companies appears to have contributed to the overall rise in users.

The average loan amount per person at the end of the first half was 17.37 million won, a decrease of 0.3% (50,000 won) from 17.42 million won at the end of last year.

The Financial Supervisory Service has set out plans to closely monitor the status of credit supply to low-credit borrowers in the lending industry, including the status of new loan issuances. This is because the outstanding loan balance, which had been declining since 2022, began to increase again in the second half of last year.

To prevent illegal debt collection and other activities that harm consumers, the authorities plan to strengthen inspections of unsound business practices and provide guidance to enhance internal controls at lending companies.

Meetings with CEOs, nationwide briefing sessions, and sessions for lending company staff are also planned. Guidance will also be provided to debtors whose statute of limitations has been revived after partial repayment of time-barred claims, including the distribution of model response letters.