South Korea’s Financial Supervisory Service published preliminary data showing that household loans across all financial sectors fell by KRW 2.2 trillion in September, reversing the previous month’s increase and recording the first decline since December 2025. Mortgage lending still rose, but growth slowed to KRW 3.3 trillion from KRW 4.3 trillion, while other lending contracted by KRW 5.5 trillion as credit loans fell more sharply. Bank household lending increased by only KRW 0.6 trillion, while nonbank lending declined by KRW 2.8 trillion. The decrease was attributed mainly to fewer housing transactions, quarter-end bad debt write-offs, holiday bonuses and other seasonal factors. Authorities nevertheless warned that housing prices and credit lending could rise in coming months, requiring continued monitoring despite the annual household debt growth target having been raised to 3.0% from 1.5%. Expanded housing loan support for young adults, particularly newlyweds, will become available from Oct. 19 as part of the government’s housing supply plan. Financial companies have been asked to check their systems, train employees and provide customers with information before implementation.
South Korea’s Financial Supervisory Service reports KRW 2.2 trillion decline in household loans, the first since December 2025
South Korea’s Financial Supervisory Service reported that household loans fell by KRW 2.2 trillion in September, the first decline since December 2025. Mortgage growth slowed to KRW 3.3 trillion, while other lending dropped by KRW 5.5 trillion. Expanded housing loan support for young adults and newlyweds will begin Oct. 19.