[Edaily Reporter Jang Young-eun ] Amid the government’s tightening of lending policies, it has become extremely difficult—almost “like trying to pluck a star from the sky”—for individuals to secure loans, not just for housing-related purposes, leading to a growing number of people turning to in-house loans. This is because, as the government implemented stringent lending regulations to stabilize the real estate market, commercial banks have already reached their annual lending limits, and some have even set their own mortgage loan limits lower than those mandated by the government.

According to the Bank of Korea on the 13th, as of the end of June, the total amount of new employee housing loans stood at 1.5 billion won, already surpassing last year’s annual total of 1.45 billion won.

The Bank of Korea’s housing loan program is an employee welfare initiative that provides loans of up to 50 million won per person to employees purchasing a new home or entering into a jeonse (long-term lease) agreement. The loan interest rate is based on the mortgage rates for each bank as published by the Korea Federation of Banks; the rate applied for housing loans in the first half of this year was 3.5% per annum. The rate for the second half of the year is 3.9%.

While this is favorable in terms of interest rates—especially considering that the upper limit for mortgage rates at commercial banks is approaching 8%—the biggest reason for the recent surge in internal loans is linked to the difficulty of securing loans elsewhere. As the government has tightened household debt management, the barriers to obtaining loans from commercial banks have become prohibitively high, leading to a situation where people are unable to secure loans even after waiting in line for “open runs” (waiting before the bank opens).

An employee in his 40s at the Bank of Korea said, “It’s nice to have the benefit of an in-house loan, but since the limit is low, I often didn’t take it when conditions were favorable (in terms of interest rates or loan limits); however, recently, I’ve noticed many people around me are seriously considering it.” Another BOK employee in his 30s remarked, “Looking at my colleagues, it seems they’re mobilizing every possible loan available because, when buying a home, they inevitably have to go all out.” The term “young-kkeul” (literally, “borrowing to the limit”) is an abbreviation of “borrowing down to one’s soul,” and the term “young-young-kkeul” has even emerged to further emphasize this extreme borrowing.

In particular, the fact that those utilizing the Bank of Korea’s in-house housing loan program are actual homebuyers is highly significant in the current situation. The Bank of Korea conducts thorough reviews, requiring applicants to submit documentation related to home purchases or leases as proof when applying for housing loans. Public institutions and private companies with similar programs follow the same procedure. For employees at small and medium-sized enterprises (SMEs) and micro-businesses—which lack the financial capacity to operate such welfare programs—the current “loan cliff” is likely to be even more painful.

Meanwhile, Samsung Electronics recently decided to limit the eligible property value for its in-house housing stability loan—which provides up to 500 million won at an annual interest rate of 1.5% to employees who do not own a home—to 2.5 billion won or less. This decision comes amid tightening loan regulations and growing interest in in-house loan programs, as concerns have been raised that such generous welfare benefits could inadvertently drive up housing prices in the Seoul metropolitan area.