Property listings posted outside a real estate agency in Seoul. Yonhap News
South Korea’s household credit surpassed 1,993 trillion won in the first quarter, marking another record high, as borrowers shifted to non-bank lenders and ramped up margin loans amid a rising stock market.
While bank lending declined under regulatory volume controls, mortgage loans from mutual finance institutions and other non-bank lenders, along with stock-market-driven “debt-fueled investment” demand, supported the overall increase.
According to the Bank of Korea’s “Preliminary Household Credit for the First Quarter of 2026,” household credit stood at 1,993.1 trillion won at the end of March, up 14 trillion won, or 0.7%, from the previous quarter. The increase was slightly smaller than the 14.3 trillion won gain in the prior quarter.
Household loans from deposit-taking banks fell by 200 billion won, turning negative as banks tightened lending from the start of the year in line with the financial authorities’ volume controls. Housing-related loans rose by just 300 billion won, the smallest increase since the first quarter of 2023.
In contrast, household loans from non-bank deposit-taking institutions, including savings banks, mutual finance, credit unions and community credit cooperatives, jumped 8.2 trillion won, double the 4.1 trillion won gain in the previous quarter. Housing-related loans alone rose 10.6 trillion won. The BOK attributed the surge to last-minute borrowing ahead of stricter regulations on mutual finance institutions.
Margin lending by securities firms also soared. Credit extensions rose 7.3 trillion won during the first quarter, the third-largest quarterly increase on record and more than double the 3.3 trillion won gain in the previous quarter. The increase reflected concentrated buying demand from retail investors amid the stock market rally early this year.
The BOK said the household debt-to-GDP ratio is likely to decline. The household credit growth rate of 3.5% was below the preliminary first-quarter real GDP growth rate of 3.6%, and nominal GDP growth is expected to be even higher.
Separately, the BOK disclosed statistics on bank jeonse (a Korean lease system requiring a large lump-sum deposit instead of monthly rent) loans for the first time this quarter. The outstanding balance of jeonse loans surged 6.5-fold over the past decade, from 25.3 trillion won at the end of 2015 to 166.6 trillion won at the end of 2025. The balance stood at 165.7 trillion won at the end of the first quarter this year, slightly down from the previous quarter.