Rate hike expected to weigh down personal debtors

South Korea's central bank's latest move to increase key rates is expected to raise the burdens for those with personal credit loans, market watchers said Sunday.

The combined personal loans extended by the country's five major banks came to 97.4 trillion won ($89.6 billion) as of end-November, up 1.7 trillion won on-month, market data showed, rising at the sharpest pace this year. The combined personal credit debts is presumed to be higher when including those extended by online banks.

As the Bank of Korea raised the key rate from a record low of 1.25 percent to 1.5 percent last week, marking the first hike in more than six years, market watchers said local households are expected to face heavier burdens from their dues moving forward. 

(Yonhap)

The sharp increase of personal credit debts apparently came as the government rolled out tougher regulations for property loans, market watchers added.

The loans expended for personal businesses by major banks also came to 199 trillion won as of end-November, up 2.5 trillion won on-month.  (Yonhap)