South Korea's household debt, which includes credit card purchases and loans, reached an all-time high at the end of last year.
According to the Bank of Korea on Tuesday, the country's household debt as of December 2020 stood at around one.five-five trillion U.S. dollars.
That's up by roughly 3 percent, or 40 billion dollars, from the previous quarter, and is the third biggest quarterly increase on record.
It was also up roughly 113 billion dollars, around eight percent on-year, after rising for five quarters in a row.
Loans from banks and financial institutions rose by about 40 billion dollars from October to December last year compared to the quarter before, a record quarterly increase.
"Due to the increase in house purchases, more mortgage loans have been taken out compared to the previous quarter. Other debt also rose significantly on-quarter as more people took out loans for living and buying stocks."
Amid the overheated housing market, mortgage loans rose by about 18 billion dollars in the fourth quarter compared to the same period last year, which is the largest quarterly increase since 2016.
An expert says, household debt is projected to get larger amid the economic crisis caused by the pandemic.
"Many households need money for everyday life as they are going through difficulties. As the government is regulating the loans at formal institutions, loans taken out from the illegal money market are expected to increase."
He added that in order to reduce the demand for loans, more quality jobs need to be created.
Eum Ji-young, Arirang News.