The average loan balance per household borrower in the country surpassed 95 million won for the first time at the end of the third quarter this year.
According to the data submitted by the Bank of Korea to Representative Park Sung-hoon, a member of the National Assembly's Planning and Finance Committee affiliated with the People Power Party, the average loan balance per household borrower was tallied at 95.05 million won at the end of the third quarter. After surpassing 90 million won for the first time with 90.54 million won at the end of the first quarter of 2021, the loan balance increased by approximately 5 million won over three and a half years.
During this period, the base interest rate sharply rose from 0.5% to 3.5%, but the increase in household loans did not slow down. After recording 93.32 million won at the end of the second quarter last year, it increased for five consecutive quarters to the end of the third quarter this year.
The total number of household borrowers was tallied at 19.74 million at the end of the third quarter. The number of borrowers gradually decreased from 19.83 million at the end of the third quarter last year to 19.79 million in the fourth quarter, 19.73 million in the first quarter of this year, and 19.72 million in the second quarter, before switching to an increase for the first time in four quarters.
Additionally, the household loan arrears rate (based on principal and interest in arrears) was 0.95% at the end of the third quarter this year, an increase of 0.01 percentage points (p) from the end of the second quarter.
The household loan arrears rate for banks remained the same at 0.36% in the second and third quarters. However, the non-bank arrears rate increased by 0.06 percentage points from 2.12% to 2.18%. In particular, the non-bank household loan arrears rate reached its highest level in nine years since the third quarter of 2015 (2.33%).
Representative Park noted, "It is urgent to meticulously manage household loans, the detonator of our economy, to prevent rapid increases and to prepare measures to reduce household debt among vulnerable groups."