Key facts
- Household loans at five major South Korean banks fell 1.28 trillion won in September.
- Total outstanding household loans reached 780.83 trillion won at the end of September.
- The decline was primarily due to a 1.34 trillion won drop in credit loans.
- Mortgage loans increased by 125 billion won in September.
- The Bank of Korea raised its benchmark interest rate in July and August.
Household loans at major South Korean banks decreased for the first time in six months in September, falling by 1.28 trillion won to 780.83 trillion won, according to data compiled from five major lenders. This marks a shift after a steady rise in loans since April, driven by increased mortgage and credit borrowing.
The decline was primarily attributed to a significant drop in credit loans, which decreased by 1.34 trillion won during September. In contrast, mortgage loans continued their upward trend, adding 125 billion won to reach 621.39 trillion won by the end of the month.
This trend occurs against a backdrop of tightened borrowing regulations and higher interest rates. The Bank of Korea had previously raised its benchmark interest rate by 0.25 percentage points in both July and August, bringing it to 3 percent.