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Debt among young Koreans soars 27 percent over recent three years

Debt among young Koreans soars 27 percent over recent three years

Posted May. 01, 2023 07:52,   

Updated May. 01, 2023 07:52


A young Korean jobseeker in his 20s, surnamed Kim, living in Gangseo-gu District, Seoul, took out a loan of 75 million won from an online bank last June when he paid a jeonse deposit for a new place. He works part time until he gets a decent job. “I had no choice but to borrow money from the bank because jeonse prices sharply grew during the pandemic,” Kim said. “I’ve tightened the purse strings since the monthly interest payment went up from 170,000 won to 330,000 won this January.”

According to reports, young generations have recently been hardest hit by soaring debt. The amount of loans among those in their 30s and below has risen almost 30 percent in the past three years. They have borrowed around 125 million won from banks and secondary loan markets per person on average. It is presumed to have resulted partly from the slowing economy and the so-called “post-pandemic bubbles” characterized by the rising house and stock prices over the COVID-19 situation.

The balance of household loans among those in their 30s and below was estimated at 514.5 trillion won as of late last year, according to the Bank of Korea’s data on the status of household debt submitted on Sunday to Democratic Party of Korea lawmaker Yang Kyung-sook, a member of the National Assembly Strategy and Finance Committee. The scale of loans grew 27.4 percent from 404 trillion won recorded in late 2019 before the pandemic occurred.

Those in their 30s and below have seen a higher increase rate in loans compared to any other age brackets. During the same period, loans rose 9.2 percent from 478.4 trillion won to 522.6 trillion won among those in their 40s. Loans increased 2.3 percent from 451.3 trillion won to 461.6 trillion won among loan borrowers in their 50s. Following those in their 30s and below, senior citizens in their 60s and above recorded the second-highest increase rate in loans from 288.6 trillion won to 362.1 trillion won by 25.5 percent.

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