Starting tomorrow, a three-stage stress total debt repayment ratio (DSR) regulation that reduces loan limits will be implemented, leading high-credit individuals to turn to the secondary financial sector, including savings banks and insurance companies. In particular, financial consumers who have recently attempted to purchase dwellings are seeking 'gap loans' that allow them to avoid DSR if they find it difficult to secure funds later, even after receiving the maximum amount for housing mortgage loans.
According to the financial sector on the 30th, among 34 savings banks that disclose credit loan interest rates, 20 banks have seen an increase in the average credit loan interest rate. According to the Savings Bank Association portal, the average credit loan interest rate for SBI Savings Bank rose from 14.27% in May to 14.38% in June, an increase of 0.11 percentage points. During the same period, OK Savings Bank increased from 16.38% to 16.95%, an increase of 0.57 percentage points, Sangsangin rose from 19.5% to 19.87%, an increase of 0.37 percentage points, and Welcome Savings Bank increased from 18.02% to 18.35%, an increase of 0.32 percentage points.
The rise in credit loan interest rates at savings banks is because even high-credit individuals are flocking to the secondary financial sector. According to statistics from the loan comparison fintech company Finda, the number of loan agreements and the amount agreed in the secondary financial sector for users with a credit score of 1000 has increased by 150% and 600%, respectively.
Along with this, interest in 'gap loans' not subject to DSR regulations has also increased. A representative example is a loan based on insurance cancellation refund as collateral (contract loan). Insurance companies, which have seen a surge in inquiries regarding related loans, are raising their loan thresholds. Samsung Fire & Marine Insurance has reduced the limit on some contract loan products from 50% of the cancellation refund to 30% since the 24th. NH Nonghyup Life Insurance has also lowered the loan limit for its whole life pension products from 95% of the refund to 50% since March.
The financial sector expects that an increasing number of consumers will seek to take the 'last train' for loans before DSR regulations tighten, leading some banks to raise interest rates and heighten loan thresholds for managing household loan balances. This situation is interpreted as high-credit individuals, who can still get loans from first-class financial institutions, seeking the secondary financial sector. Moreover, financial consumers are exchanging information about loans that are not subject to DSR regulations, anticipating that the trend of tightening loans will continue for the time being.
Interpretations suggest that the influx of high-credit individuals into the secondary financial sector, including credit cards, insurance, and savings banks, is also partly due to 'credit score inflation' at commercial banks. This year, commercial banks have raised their loan thresholds in accordance with the government's household debt management atmosphere. According to the Consumer Portal of the Korea Federation of Banks, the average Korea Credit Bureau (KCB) credit score for individuals who received general credit loans from the four major commercial banks, including Shinhan, Woori, Hana, and KB Kookmin, last month was 933.75. The lower limit for the average credit score for loan eligibility is 922 points, while the upper limit is 942 points.
Individuals with a KCB credit score over 900 are classified as first grade and high-credit individuals. However, high-credit individuals with scores in the low 900s find it effectively difficult to get loans; hence, they are seeking the secondary financial sector, where the screening process is less stringent despite slightly higher interest rates. A source within the secondary financial sector noted, 'There has definitely been an increase in inquiries about taking loans to the secondary financial sector, where the limits are higher than at banks before the regulation takes effect,' adding, 'While it's not yet at a level felt across the entire industry, high-credit individuals are increasingly being seen in recently concluded loan agreements.'