I’m running out of trouble… Financial authorities “wait until March”

Before the financial authorities announced a plan to advance household debt, confusion in the market was intensifying.

Until the announcement of the system in March, the Financial Services Commission is drawing a line saying that details on the amortization of credit loans are under policy review, but it is being criticized for causing controversy that the policy was pre-disclosed in a hurry to catch liquidity.

◆ Banks cut their loan limits… Mahtong balance’leaping’

According to the financial sector on the 25th, banks are struggling to cut back on credit loans that resumed earlier this year. This is an immediate action following the warning of the government’s’constraining loans’ that manage household loans. Shinhan Bank and Kakao Bank each reduced the maximum credit limit for office workers by 50 million won.

Other banks are more likely to reduce their credit limit in a series as the financial authorities have strongly driven the regulation of the total amount of loans by bank.

While the limit for banknotes is being cut, the loans of financial consumers are increasing backwards.

From the 4th to the 21st of this month, a total of 31,305 new credit loans through the negative bankbooks of the five major banks (KB Kookmin, Shinhan, Hana, Woori, and NH Nonghyup) reached 31,305. The account balance also increased by 670 billion won this year. The negative bank account balance jumped from 4.653 billion won at the end of last year to 47,207.6 billion won on the 21st of this month.

The financial sector expects loan demand to continue to increase until next month. As the money market is rapidly shifting to the stock market, it is clear that the loan limit will decrease and the method of lending will become difficult in the future.

◆ The ability to repay the borrower, how to evaluate it

Market turmoil is intensifying as financial authorities disclose regulations as’taste’. Seolwangseolrae come and go over the details of the regulation.

It is known that the financial authorities are focusing on’repayment ability’ for loans and are considering applying them according to the borrower’s repayment ability instead of a uniform loan amount.

In this case, the borrower’s annual salary and debt are considered. Earlier, the authorities stated that they would convert the total debt principal repayment ratio (DSR) currently managed by financial companies into DSR review by borrower unit. DSR is the repayment of principal and interest for all loans, including mortgage and credit loans, divided by annual income. Whether it’s better to get a loan in advance or when it’s needed to meet the new regulations, it’s up to the individual’s DSR.

Not only income but also maturity is a problem. Currently, credit loans are structured to pay only interest every month and pay the principal at maturity at once. It is possible to extend the maturity by one year.

As the confusion grew, the authorities decided not to retroactively apply the principal amortization obligation to existing loans and to not include negative bankbooks.

Finance Commissioner Eun Seong-soo said, “Household loans are a part that has to be paid off in the end, so if we divide it little by little, would it not be good to pay it off?” It is too much to ask for, and I will talk to the financial sector.