Office worker A, 29, recently tried for three straight days to apply for an unsecured loan through a bank's mobile application (app) but failed each time. The bank's daily loan handling limit was exhausted early, making it hard even to apply.
A said, "I needed a lump sum, so I logged into the app at different times such as midnight, 6 a.m., and 9 a.m., but every time it only said the limit was used up."
As banks cut the supply of mortgage loans and jeonse loans in line with the government's household loans control stance, an "open run" to get unsecured loans has even appeared. As the loan limit for housing loans has been reduced or applications have closed early, demand has piled up to cover the shortfall with unsecured loans. At some banks, it is hard even to apply for a loan, whether logging into the app right when business starts or visiting a branch.
◇ Higher loan threshold… both the app and counters are "first come, first served"
According to the financial sector on the 22nd, competition to secure loans is fierce not only on mobile apps but also at bank branches. B, in their 30s, who signed an apartment contract this month, said, "Banks usually take applications starting 60 days before the balance due date, but I was told all September disbursement slots could be filled even before the application window opened," adding, "I barely managed to file an application by going to a branch in Hanam, Gyeonggi, over the weekend. If I had waited until Monday, it would have been hard to get the loan."
Banks are pre-allocating monthly loan disbursement limits, leading even the volumes set for disbursement two months out to be used up early.
Major commercial banks have recently raised the bar for housing-related loans one after another. KB Kookmin Bank cut the maximum limit for mortgage loans on dwellings in the Seoul metropolitan area and regulated zones from 600 million won to 300 million won earlier this month. Shinhan Bank halted new mortgage loan applications submitted through loan brokers. Hana Bank also stopped taking broker-submitted applications as of the 10th for mortgage loans and jeonse loans scheduled for September disbursement.
Behind the banks' move to reduce loan supply is the financial authorities' total volume control of household loans. Early this year, the financial authorities set bank-by-bank household loans growth targets and said they would manage them monthly, quarterly, and semiannually.
The approved volume of mortgage loans at the four major commercial banks (KB Kookmin, Shinhan, Hana, Woori) rose from 5.5917 trillion won in May to 7.2611 trillion won in June, an increase of 1.6694 trillion won. As loan growth accelerated, banks moved to curb new loan originations to meet their targets.
A staff member at a commercial bank branch said, "With the mobile loan limit used up, more customers are coming directly to branches," adding, "We do not set separate total loan caps by branch, but we are adjusting overall origination volumes in line with the government's household loans control stance."
◇ With loans blocked, some douse the immediate fire with a "parents' chance"
The loan curbs are also heightening confusion among end users who need to pay apartment balances. Real estate online communities are filling with posts such as, "I'm more worried about the loan application date than the balance due date," "I'm staring at the bank app every day," and "Both mortgages and unsecured loans are a war."
Office worker C, 30, who had to pay an apartment balance earlier this month, said, "During the initial consultation, I was told a 600 million won mortgage loan was possible, but right before disbursement, it turned out the actual available amount had been cut to 500 million won," adding, "In the end, my parents had to take out an unsecured loan to make up the missing 100 million won."
◇ Will the real estate policy forum be a turning point?
The financial authorities have said they would maintain the current stance, seeing a risk that easing household debt controls could stimulate the real estate market. However, there is room for change starting with the real estate policy forum chaired by President Lee Jae-myung on the 23rd.
Ahead of the forum, the government solicited public proposals on real estate policy, and as of 3 p.m. that day, 2,029 out of 4,661 submissions (43.6%) were related to "housing finance." It outnumbered "housing supply," 1,460 (31.3%), and "real estate taxation," 1,172 (25.1%).
In particular, among the proposals on housing finance, many called for easing regulations on interim payment and balance loans. One proposer, lamenting that balance loans had been blocked, wrote, "This is neither for speculation nor from a multi-homeowner, and it goes against the policy's intent to block normal housing transactions even for a one-household, one-home buyer purchasing for actual residence."