SEOUL, May 5 (Korea Bizwire) — Eight out of 10 young people in their twenties who applied for personal rehabilitation took out loans from secondary financial institutions including credit cooperatives and savings banks, a survey showed Wednesday.
The Seoul Financial Welfare Counseling Center conducted a survey of 512 young people in their twenties who completed the center’s financial guide program.
When they applied for personal rehabilitation, their per-capita debt averaged at 62.6 million won (US$49,430).
Designed for people below 29 years of age among those who have applied for personal rehabilitation, this program helps them shorten the repayment period if they take one-on-one financial counseling based on the court’s recommendation.
Among the respondents, 78 percent, or 400 people, had loans from non-banking institutions, followed by 76 percent (388) with credit card loans and 72 percent (370) with bank loans.
Another 54 percent (277 people) said that the amount of their debts increased beyond their repayment capacity during the process of repaying other debts, while 63 percent (313 people), noted that they had repaid debts by taking out additional loans for fear of becoming credit delinquents.
About half of the respondents had an average monthly income ranging between 1 million won and 2 million won, followed by 45 percent (230) who had an average monthly income ranging between 2 million won and 3 million won.
Around two-thirds of the respondents (346 people) had a permanent job, but the share of those with more than three years of service remained low at 19 percent, indicating a lack of job security for many.
M. H. Lee (email@example.com)