S.Korea To Tighten Lending Rules On Fast Growth Of Household Debt

S.Korea to tighten lending rules on fast growth of household debt

SEOUL, Oct. 26 (UrduPoint / Pakistan Point News - 26th Oct, 2021 ) --:South Korea's financial regulator said Tuesday that it will tighten lending rules based on borrowers' repayment capability as household debt continued to grow fast.

According to the Financial Services Commission (FSC), the regulator launched a 40-percent debt service ratio (DSR) regulation since July to spread the lending practices based on repayment capability.

The DSR refers to a ratio of how much principal and interest borrowers should pay annually to their annual income.

Since July, the ceiling has been applied to mortgage loan of over 600 million won (514,000 U.S. Dollars) in regulated regions and credit loan of over 100 million won.

The 40-percent ceiling on the combined loan will be applied earlier than initially scheduled to the outstanding loans of over 200 million won in January next year and of over 100 million won in July next year each.