More Young Koreans Owe Money to Multiple Lenders

People in their 20s and 30s make up the biggest proportion of Koreans who owe money to three or more financial institutions.

According to the Bank of Korea, 4.47 million Koreans had taken out multiple loans as of late last year, up 76,000 from a year earlier. The number of young borrowers increased most dramatically by 65,000 to 1.42 million.

The number of over-60s also rose by 40,000, while the number of 50-somethings increased only by 5,000. The number of multiple borrowers in their 40s dwindled by 34,000.

The number of multiple borrowers in their 20s and 30s jumped by 153,000 over the past three years due to a stock and crypto frenzy.

The overall loan balance of multiple borrowers fell from W600.20 trillion in late 2021 to W583.90 trillion a year later, but the money owed by multiple borrowers in their 20s and 30s rose by W200 billion to W157.40 trillion (US$1=W1,299).

The average amount of debt per multiple borrower stood at W130.50 million late last year, substantially more than the W83.25 million more prudent borrowers owed to only one or two banks.

Many multiple borrowers are paying high interest rates because they borrowed not only from high-street banks but from second-tier lenders.