As the household loan-to-income ratio (LTI) of the self-employed in the first income quintile reached 669.3% last year, concerns are growing over the insolvency of vulnerable borrowers amid the interest rate hike. Hankyung DB
Consumers in personal finance will be able to get more credit than their annual income from major commercial banks from next month. This is because regulations on credit loans that limit annual income or less ended at the end of this month.
According to the financial industry on the 12th, major commercial banks assumed that the credit loan limit regulation would be lifted next month and started checking the related systems. In August of last year, commercial banks began to limit the credit limit at the request of the financial authorities to “reduce the personal credit loan limit to the annual income level.” In December of last year, the Financial Services Commission specified the limit on credit loans in the ‘Risk Management Standards for Household Loans’ and set the effective deadline to the 30th.
There are many observations in the banking sector that it is unlikely that the rule will be extended beyond the end of this month. Therefore, starting next month, it is expected that banks will be able to receive credit loans with more than annual income once more as long as they meet the DSR criteria. An official from the financial authorities also said, “There are criticisms that the current limit regulation within the annual salary is rigid.”
When the limit on credit limit is removed, it is meaningful that most of the loan restrictions introduced by banks last year will be lifted. Since this year, commercial banks have removed most of the restrictions such as the maximum negative account limit of 50 million won, the acknowledgment of deposits for increased rental deposits before the balance date, and the reduction of non-face-to-face loans. As of the end of May, the balance of household loans at the five major commercial banks, including Kookmin Shinhan, Woori Hana, and Nonghyup, decreased by 7.99 trillion won in five months.
There are concerns that household loans, which have been difficult to catch due to the successive easing of loan regulations by commercial banks, may return to an increasing trend. Regarding household loans, the Bank of Korea recently said, “The level of household debt is still high compared to the size of the economy.
However, even if the total loan amount exceeds 100 million won from July, the ‘DSR 40%’ regulation for each borrower will be applied, and the sluggish asset market such as real estate, stocks, and virtual currency is also an observation that even if most of the loan regulations are relaxed, loans will not increase significantly. have.
By Park Sang-yong, staff reporter yourpencil@hankyung.com
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