Banks' average lending rates for households in Korea rose to the highest level in about eight years in May, in line with the central bank's aggressive push to raise borrowing costs to tackle fast-rising inflation, data showed Thursday.
With more base rate increases imminent by the Bank of Korea, the price of money for individuals is likely to continue rising.
Household debt rose 5.4 percent on year in the first quarter to 1,859.4 trillion won ($1.47 trillion), the Bank of Korea reported. On quarter, the total dropped by 600 billion won. It was the first quarterly decline since the first quarter of 2013.
Banks are easing loan regulations as household debt slumps.
Korean banks said Wednesday they will raise the maximum cap for people taking out loans when renewing their jeonse (long-term rental deposit) contracts, from the previous 80 percent of the amount that had been raised to 80 percent of the ...
Kakao Bank, the biggest online bank, is aggressively going into the mortgage market.
Borrowing money is getting harder as credit card companies jack up interest rates and even private lenders turn away customers.
Amid growing concern over the spread of the Omicron variant and interest rate hikes, the Financial Services Commission asked lenders to shore up their bad debt reserves and brace for a potential loan crisis.
Loan interest rates are skyrocketing, hitting record levels as restrictions continue to limit the amount of lending.