K-Herald

One-Third of Households Owe W110 Million Each

by 조선편집국 posted Nov 30, 2016

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Nearly one third of households have seen their bank loans almost double to W110 million last year, according to a report by the Korea Development Institute on Thursday (US$1=W1,182).

Some 29 percent of all households took out more loans in 2015 and their debts rose by W44.7 million on average to W110.7 million from W66 million in 2014.

The proportion of households whose debts increased from the previous year has fallen slightly, from 35.5 percent in 2013, but total household debts increased. The KDI said that means more in that group are now heavily in debt.

An estimated 80 percent of the growth in household debt is shouldered by people in their 30s and 40s, and households in the top 20 percent of the income bracket accounted for 51 percent of the increase.

Household debt increased around W74 trillion from 2014 to 2015, 55 percent of it used to buy homes and other real estate. The increase was due to low interest rates and eased government regulations.

Kim Jee-sup at KDI said, "If interest rates rise, household burdens could spike rapidly."