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S. Korea Household Credit Hits Record High as Growth Slows Amid Rules

South Korea's household credit reached a new all-time high of 1,978.8 trillion won in the fourth quarter of 2025. However, the pace of growth slowed for the second consecutive quarter amid government efforts to tighten lending. A central bank official stated household debt is unlikely to rise sharply in the near term due to these strict management policies. The government has implemented measures including designating all Seoul districts as speculative zones and lowering mortgage loan caps.

Key Points: S. Korea Household Credit Growth Slows, Hits Record High

  • Record high household credit
  • Growth slows for second quarter
  • Tighter mortgage lending rules
  • Seoul districts under speculative zones
2 min read

Household credit growth in S. Korea slows amid regulations

South Korea's household credit reached a record high in Q4 2025, but growth slowed for a second straight quarter amid tighter lending regulations.

"household debt is unlikely to increase sharply for the time being - BOK official Lee Hye-young"

Seoul, Feb 20

South Korea's household credit growth slowed in the fourth quarter of 2025 amid tighter lending regulations, though the total outstanding amount reached an all-time high, central bank data showed on Friday.

Outstanding household credit stood at 1,978.8 trillion won (US$1.36 trillion) as of end-December, up 14 trillion won from three months earlier, according to the preliminary data from the Bank of Korea (BOK), reports Yonhap news agency.

The reading marks the highest since the BOK began compiling relevant data in 2002.

It also represents the seventh consecutive quarterly increase, though the pace of growth slowed for the second straight quarter.

Household credit refers to credit purchases and loans extended to households by financial institutions.

In detail, household loans stood at 1,852.7 trillion won at the end of December, up 11.1 percent from three months earlier. Of the total, mortgage lending rose 7.3 trillion won to 1,170.7 trillion won, slowing from a 12.4 trillion-won increase in the previous quarter.

Credit purchases climbed 2.8 trillion won on-quarter to 126 trillion won, slowing from a 2.9 trillion won rise in the third quarter, the data showed.

"As the government has been emphasising strict management of household lending since the beginning of the year, household debt is unlikely to increase sharply for the time being," BOK official Lee Hye-young told a press briefing.

"But uncertainties remain high, given the slight increase in housing transactions toward the end of last year and the resumption of lending operations by financial institutions at the start of the year," the official added.

The government has implemented a series of measures to cool the overheated housing market and curb household debt. Under the comprehensive policy package announced in October, the government designated 21 additional districts in Seoul as speculative zones, bringing all 25 districts in the capital under stricter regulations.

It also tightened lending rules, lowering the cap on mortgage loans to as little as 200 million won, down from the 600 million-won limit set in June.

- IANS

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Reader Comments

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Priyanka N
1,978.8 trillion won?! That's a mind-boggling number. Even with slowing growth, the total debt is at an all-time high. It shows how deep the issue is. Hope people there are not over-leveraged like many young professionals are becoming here.
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Aman W
The government designating entire Seoul as a speculative zone is a bold move. We need such decisive action in Indian cities where property prices are disconnected from average incomes. But implementation is key.
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Sarah B
Slowing growth is a good sign that regulations are working, but as the official said, uncertainties remain. It's a delicate balance - cool the market without causing a crash. A lesson for all economies, including India's.
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Karthik V
Reducing mortgage cap from 600 million to 200 million won is a huge drop! That's some serious tightening. While necessary, I hope it doesn't hurt genuine middle-class home buyers. Sometimes regulations hit the wrong people.
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Nikhil C
Seventh consecutive quarterly increase... the debt monster is still growing, just slower. This is a global issue now. Easy credit earlier has created this problem. Financial literacy is so important, baap ka paisa nahi hai jo chalta rahega.

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