Loan Defaults on the Rise at Online-Only Banks

More and more customers are defaulting on their loans from online-only banks.

Data from Kakao Bank, K-Bank and Toss Bank show that their credit loan delinquency rate stood at 1.2 percent as of the end of August, up from 0.3 percent at the end of 2021.

That is around twice as high as the delinquency rate at established commercial banks.

The rate is even higher for customers with low credit ratings at 2.8 percent, up more than three times from a year ago. The rise is attributed mainly to soaring interest rates.

The average interest rate charged by top-ranked Kakao Bank has risen from 4.07 percent to 6.33 percent over the past year.