From next month, major commercial banks will expand the limit of personal credit loans to more than double their annual income.
According to the financial industry on the 23rd, Kookmin, Shinhan, Woori, Nonghyup Bank, and K-Bank, an internet-only bank, decided to remove the regulation that limits the maximum credit loan limit to the borrower’s annual income from July 1.
Kookmin Bank provides credit loans up to twice the annual salary in consideration of credit rating and income. Nonghyup Bank has decided to change the personal credit loan limit from 10-100% of annual income to 30-270%. As a result, you can get a credit loan up to 2.7 times your annual salary. Nonghyup Bank also raised the limit of personal business credit loans (SOHO loans) to 305% of annual salary. However, personal credit loans and SOHO credit loans cannot exceed 250 million won and 160 million won, respectively.
Shinhan Bank will also abolish the regulation that binds credit loans to within the annual salary. We are considering a plan to allow 1.5 to 2 times the annual salary for office workers and more than twice the amount of credit for professional workers.
As household debt surged in the second half of last year, the government began to manage the total amount of loans. As a result, major commercial banks have tied the credit limit to within the annual income. In December of last year, the Financial Services Commission specified the limit in the ‘Risk Management Standard for Household Loans’ and set the effective deadline to June 30 this year.
However, since this regulation has not been extended, starting next month, as long as the standard of the total debt-to-income ratio (DSR) is met, the bank can again receive more credit than the annual salary. However, it is expected that the timing of the extension of the credit limit will vary depending on the bank, as it will take time for inspection to restore the system to the pre-regulation.
If the limit on credit loans is increased, there are many forecasts that a significant part of it will be used to raise money for Jeonse.
By Park Sang-yong, staff reporter yourpencil@hankyung.com
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