Credit loans 1trillion6,000surge prompts banks to reduce limits and raise interest rates

Since the beginning of this month, household lending at commercial banks has increased by 2trillion8,000hundred million won, while credit loans have surged by 1trillion6,000hundred million won, prompting banks to impose restrictions on credit loans. These figures are directly linked to the increase in household debt.

Several banks have raised fixed-term deposit rates to the 3% range to strengthen efforts to attract corporate funds and deposits. The increase in deposit rates shows changes in banks’ funding costs.

Banks are implementing measures across the board to reduce credit loan limits and raise interest rates in an effort to prevent the spread of debt-financed investing. These measures are aimed at restricting individuals’ patterns of using loans.

Shinhan Bank and Hana Bank have begun applying limits on credit loan amounts. The banks have tightened loan reviews through internal guidelines.

Woori Bank has halted credit loan transfers through loan comparison platforms. The measure blocks the fast loan-transfer route offered through platforms.

As reduced limits and higher interest rates are being implemented across the banking sector, access to personal credit loans is declining. Financial institutions are adjusting their policies to strengthen loan management.

Discussions on household debt and loan regulations also continued at policy conferences. The policy direction is trending toward placing greater emphasis on containing household debt.