As the recent strength in Korea's stock market fuels a surge in "bit-too" ("borrowing to invest"), banks are tightening unsecured loans to curb excessive leverage.
According to the financial sector on the 12th, Hana Bank will cap the unsecured loan limit for high-salary earners at a maximum of 100 million won starting today. The bank will cap an individual's maximum limit for new unsecured loans regardless of the borrower's annual income. It will also toughen reductions of unused limits when extending overdraft accounts.
Hana Bank had already been reducing a set amount for accounts with unused limits at the time of maturity extension, but allowed some exceptions depending on product characteristics. It plans to ban such exception clauses and enforce limit reductions in line with the rules.
Shinhan Bank will also begin managing unsecured loans on the 15th. If the combined daily intake of face-to-face and non-face-to-face unsecured loans exceeds internal control thresholds, Shinhan Bank will restrict non-face-to-face unsecured loan applications. Products that support financially vulnerable groups, such as policy finance loans for low-income borrowers and the win-win refinancing loan, will be excluded from intake restrictions.
In addition, among household unsecured loans with a contracted amount exceeding 30 million won, for overdraft (minus account) loans, accounts with a limit utilization rate below 10% based on the contracted term and the three months immediately before maturity will face up to a 20% limit reduction upon maturity extension.
NongHyup Bank will reduce preferential rates applied to mortgage loans and unsecured loans by 0.2 percentage point (p) and 0.1p, respectively, starting on the 15th. As a result, the lower bound of lending rates is set to rise. Earlier, Woori Bank said it had halted applications for non-face-to-face unsecured loan refinancing products as of the previous day and would block all unsecured loan applications flowing in through loan comparison platforms such as Kakao Pay, Naver Pay, Finda and Toss.