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The Financial Services Commission “is applied differently for each individual based on income and maturity”
‘Household debt countermeasures’ announced in March after detailed plans were confirmed
30,000 new banks opened this year, ‘Matong’ ↑
The Financial Services Commission is reviewing a plan to apply the amortization of major credit loans, which has been discussed as the main content of the measures for household debt, to large credit loans that exceed annual income. Concerned about the turmoil in the loan market, the company decided not to create a uniform standard to “apply to all loans over 100 million won.”
The Financial Services Commission said “details have not been confirmed,” but one thing is for sure. The credit loan threshold is higher than now. At the bank counter, the ‘latest car demand’ for advance loans was enthusiastic, and only negative bank books opened this year have passed 30,000.
○ “Loans must be reduced beyond repayment”
According to the Financial Services Commission on the 24th, the ‘plan to advance household debt’ to be announced in March focused on borrowing money within the scope of the borrower’s repayment capacity. An official with the Financial Services Commission said: “It is necessary to avoid excessive loans by considering the borrower’s repayment capacity and the loan period comprehensively, and to repay them in partial installments if it is likely to exceed the repayment capacity.”
The Financial Services Commission announced on the 19th in its New Year’s business plan that “we will consider a plan to require repayment of principal on credit loans above a certain amount.” In the case of a mortgage loan, principal and interest must be paid at the same time, but it is common for credit loans to pay only interest and continue to extend maturity. In the future, the intention is to avoid overinvestment in stocks and real estate by changing credit loans to repay principal and interest together, and with a “zero-up” loan (a loan that is received at the maximum limit) .
An official from the Financial Services Commission said: “It is not possible to set the standard for applying the installment payment as the loan amount and income must be considered.” When comparing the amount of credit loans with income, it does not matter if they are repaid at once or if they are divided if they are manageable, but the authorities recognize that if you borrow more than your income, you should stop it.
○ ‘Everything’ credit loan becomes difficult
In addition to the borrower’s income, the loan period is also expected to be variable. The maturity of a credit loan is generally extended in 1-year increments and can be up to 10 years. The Financial Services Commission said: “It makes no sense to force payment in installments, even for short-term credit loans.” It is envisaged that it will be possible to force amortization if the maturity is extended by extension after not applying the amortization at the beginning. The Financial Services Commission said: “Specific criteria for the repayment of credit loans have not been determined” and “We will collect input from the financial sector and announce them in March.
Another key aspect of household debt countermeasures is applying the Total Debt Principal Repayment Rate (DSR), which is administered at the individual financial institution level. The Financial Services Commission’s plan is to gradually replace the Total Debt Payment Ratio (DTI) used in home loan review by DSR.
DSR is the value obtained by dividing the repayment of principal and interest for one year on all home loans, including mortgages and loans, by the annual income. Now, since each bank only needs to match an average of 40%, the individual DSR can exceed 40%. This means that the DSR per person is applied collectively so that it does not exceed 40%. In this case, the credit limit for those who received mortgage loans, etc., will naturally decrease. Furthermore, the introduction of large credit loan repayments has the effect of increasing the individual DSR as the numerator of the DSR increases.
○ ‘Matong opened’ more than 30,000 new 3 weeks
Among these, many consumers are trying to secure a generous loan limit up front. The Financial Services Commission decided not to retroactively apply the new system to credit loans received before the application of the regulation.
From the 4th to the 21st, the number of new credit loans from the top five banks (Kookmin, Shinhan, Hana, Woori and Nonghyup) with a negative bankbook (loan with transaction limit or automatic loan from bankbook) was counted at 31,305 . At the end of last year, 1,000 negative bank books were opened per day and more than 2,000 boxes are currently being opened. The negative bank loan balance of these five big banks increased by 6.766 billion won in three weeks. A banking industry official said: “Before lending regulations were tightened, the number of people trying to break away from ‘Matong’ has increased a lot recently.” I did it “.
However, the total credit balance of the major banks remains at the level of the management target suggested by the authorities (maximum increase of 2 trillion won per month). A bank official said: “Maton’s new openings and balances are increasing, but the new loan cap has dropped, so the overall range is manageable.” The Financial Services Commission and the Financial Oversight Service set monthly credit loan targets for each bank and then submit and inspect the figures every day.
Recently, credit lending rose rapidly when the government announced stricter regulations on lending, and then gradually declined when banks restricted new lending. In the two days since the 19, when the plan to repay the principal repayment of large credit loans was revealed, the credit limit of the top five banks increased by more than 700 billion won. When measures to strengthen DSR regulations for high-income people were announced in November last year, credit loans increased 1.5 trillion won for a week.
Reporter Lim Hyun-woo [email protected]
