While President Moon Jae-in ordered to come up with a plan to help the youth of 'multi-debtors', it was found that the amount of jeonse loans for young people in their 20s and 30s increased by about 60 trillion won over the past five years to 88 trillion won.
According to data received from the Financial Supervisory Service by Rep. Jeong Un-cheon, a member of the National Assembly's Planning and Finance Committee, on the 22nd, the real estate 'spirit (collecting souls)' loan craze hit the jeonse crisis, The balance of Jeonse loan loans for young people in their 20s and 30s has surged to 88.234 trillion won in five years.
Youth loans accounted for 60% of the total loan balance.
In particular, the balance of Jeonse loans in their 20s was only 4.389 trillion won in 2017, but in June of this year, it increased more than fivefold to 24.3886 trillion won.
Household loans among young people are also on the rise.
The share of young people in total household debt has increased significantly since the COVID-19 outbreak, reaching 26.9% in the second quarter of this year.
The rate of increase in household debt among young people was 12.8% compared to the same period of the previous year, significantly exceeding the rate of increase of 7.8% for other age groups.
The level of regulation for the Jeonse loan is relatively low, such as not considering the principal repayment ratio when calculating the total debt repayment ratio (DSR).
In addition, the government's Jeonse fund support program for housing support for young people is operated in various ways, so the demand from the young people is relatively high.
However, young people still have low income and assets, so their financial health is weak compared to other age groups to handle excessive debt.
The proportion of young people with multiple debtors (borrowing from three or more financial institutions) and the bottom 30% of income or with a credit score of 664 or lower is 6.8%, which is higher than that of other age groups (6.1%).
In addition, the proportion of low-income borrowers among young people in the bottom 30% of income brackets was 24.1% as of the second quarter of 2021, nearly double that of other age groups, 14.4%.
Rep. Jeong Un-cheon said, "In the case of young people, the proportion of vulnerable borrowers is higher than that of other age groups, and as the debt burden increases, such as interest rate hikes, there is a risk that healthy consumption activities will be restricted." And there is an urgent need to come up with preemptive management measures.”
(Photo = Yonhap News)