The South Korea Financial Services Commission published preliminary data showing the outstanding balance of household loans across all financial sectors increased by KRW 1.4 trillion in January 2026, reversing a KRW 1.2 trillion decline in the previous month. The increase was driven by stronger growth in the nonbanking sector even as household loans in the banking sector continued to contract. By type, home-backed mortgage loans rose KRW 3.0 trillion, while other household loans fell KRW 1.7 trillion, with credit loans declining KRW 1.0 trillion. By sector, bank household loans fell KRW 1.0 trillion, reflecting a faster decline in banks’ own mortgage products (down KRW 1.7 trillion) alongside a rise in policy-based mortgage loans (up KRW 1.1 trillion), and a smaller fall in other loans including credit (down KRW 0.4 trillion). Nonbank household loans rose KRW 2.4 trillion, led by mutual finance (up KRW 2.3 trillion) and a return to growth at savings banks (up KRW 0.3 trillion), while insurance companies’ household loans fell KRW 0.2 trillion and specialized credit finance businesses recorded a marginal decline of KRW 0.02 trillion. The Commission attributed the upturn mainly to early-year resumption of lending operations and increased group lending in the nonbanking sector, and noted household loans could expand further in February as the spring moving season approaches. It said authorities will strengthen monitoring and tighten household loan management while avoiding excessive liquidity shortages for vulnerable borrowers, including young adults and borrowers with mid-to-low credit profiles.

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