66,000 Young People in Their 20s Struggle with Debt

The number of people in their 20s with credit issues has increased by over 25% in three years, reaching 66,000 this year. This is interpreted as a result of the ⁤worsening ‍financial difficulties‌ faced by young people.

According to the ‘Data on Credit Risk Factors by Industry for the Past 3 Years’ submitted to⁢ the office of Democratic‌ Party of Korea member Lee Kang-il ⁣from​ the Financial Supervisory Service, ​the number of people in⁣ their⁤ 20s registered ​as credit risk factors with the‌ Korea Credit ⁤Information Services as of the⁢ end of July was 65,887 (excluding duplicates), a 25.3% increase from the end of 2021 (52,580).

Compared to ‍the ⁤fact that the total number of credit risk takers increased by ​about 8% from 548,730​ to 592,567 during the⁢ same period, the increase among‍ those in their ‌20s is notable.

If a credit risk⁤ holder ⁢exceeds a certain period of delinquency ​(e.g. 3 months after loan maturity​ or 6 months after delinquency),​ they will be registered with a credit information agency and ‌will face financial disadvantages such as suspension ⁣of credit​ card use, ​restrictions on loan use, and a drop in credit rating.

The ​number ⁤of people who were registered as credit‌ risk due to failure to repay loans received from banks was 33,610, accounting for half of the total. This was followed by savings⁢ banks (22,356 people)⁢ and credit unions (16,083‌ people).

A high proportion of small-amount delinquent borrowers was found​ to ⁤be ⁢a characteristic of youth debt.

As of the end of July, there were ⁤73,379 people in their 20s (excluding delinquent credit card payments) whose short-term ⁢delinquency information was registered with a credit rating‌ agency⁢ (CB), and 64,624 (88.1%) had a delinquent amount of ’10 million​ won or less’.

This ⁣means that 9 out of ⁤10 delinquent borrowers ​in their 20s are small ‌debtors.

It is estimated that a significant number of young people are experiencing difficulties related to their ⁤livelihood,‌ such as living⁤ expenses or housing costs.

Rep. Lee Kang-il ‌pointed out that, “Rather ‌than simply resolving the small-scale delinquency ⁤problem⁢ among young people through financial means such as debt adjustment, we must ​also implement macro-level youth policies such‌ as job creation and social policies.”

By Park So-hyun