Customers conduct banking transactions at a bank branch in Seoul. (Yonhap)
SEOUL, Feb. 11 (Korea Bizwire) — Household loans extended by South Korean banks fell for a second consecutive month in January amid tightened lending regulations aimed at stabilizing the housing market, central bank data showed Wednesday.
Outstanding household loans stood at 1,172.7 trillion won (US$805.75 billion) at the end of January, down 1 trillion won from a month earlier, according to the data from the Bank of Korea (BOK).
The figure had dropped for the first time since January 2025 in December and extended its downward trend into a second straight month in January.
Home-backed loans declined 600 billion won from a month earlier in January, following a 500 billion-won drop the previous month.
Unsecured and other household loans fell 400 billion won on-month, narrowing from a 1.5 trillion-won decrease in December.
The photo shows the in-person service counters at KB Kookmin Bank’s Yeouido branch in Seoul. (Yonhap)
The government has tightened loan and home purchase regulations in response to surging housing prices in Seoul and parts of the greater metropolitan area.
“Banks have continued efforts to manage lending in line with government guidelines, while demand for ‘jeonse’ loans has slowed,” a BOK official said. “Despite inflows of early-year bonuses, other loans posted only a marginal decline amid increased domestic and overseas stock investment.”
Jeonse is a unique South Korean housing rental system in which tenants make a large lump-sum deposit that is fully returned at the end of the lease.
Corporate loans, on the other hand, rose 7.8 trillion won from a month earlier in January, following a 5.7 trillion-won gain the previous month. Outstanding corporate loans stood at 1,369.6 trillion won as of end-January.
“Household loan growth could accelerate and become more volatile in February, as financial institutions begin full-scale operations in the new year and demand for moves ahead of the new school year increases,” a BOK official said, reaffirming the central bank’s continued efforts to strengthen market monitoring and management.
(Yonhap)
