New household loans fall to KRW 34.1 million as mortgages shrink
Newly issued household loans in South Korea fell by KRW 1.28 million to KRW 34.14 million per borrower in the second quarter of 2026. The Bank of Korea reported that average outstanding debt per borrower edged up to KRW 97.90 million.
Mortgage originations lead the pullback
New mortgage loans per borrower recorded KRW 208.29 million in the second quarter of 2026, falling by KRW 21.10 million from the previous quarter.
The contraction in newly extended credit was concentrated in non-bank financial institutions, where originations decreased by KRW 14.39 million to KRW 27.91 million per borrower.
In contrast, new bank loans rose by KRW 3.42 million to KRW 50.13 million.
Borrowers in their 40s experienced the largest reduction in new borrowing, dropping KRW 5.83 million to KRW 35.88 million.
In the Seoul metropolitan area, which accounts for 59.4 percent of new credit volume, average new loans declined by KRW 1.93 million to KRW 37.80 million per borrower.
Accumulated debt stock continues to climb
While new loan flows moderated, existing debt burdens continued to accumulate.
The average outstanding loan balance per borrower reached KRW 97.90 million at the end of June 2026, up KRW 500,000 from March.
Outstanding mortgage balances rose by KRW 1.87 million quarter-on-quarter to KRW 161.93 million, representing 52.5 percent of total household debt.
The micro-level statistics are compiled from a 4.8 percent sample of credit bureau records from NICE.
Flow slows while balance sheets stretch
The quarterly dip in new loan originations shows credit tightening taking hold across non-bank lenders.
Yet the persistent increase in total debt per borrower proves that balance sheet vulnerability remains unaddressed.
Real financial stability will require actual reduction in debt stocks rather than marginal quarterly slowdowns in new flows.