Deteriorating Internet Banking Health with College Students
Deteriorating Internet Banking Health with College Students
  • Ha Ji-hyeon
  • 승인 2023.11.28 12:37
  • 댓글 0
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(Provided by Unsplash)
(Provided by Unsplash)

  When banks lend money to customers based on their credit score, it is commonly called a credit loan. Currently, the rate of indiciduals unable to repay these loans is rising. For example, the ‘Medium and Low-interest Loans’ delinquency rate for people with relatively low credit scores reached about 3%, the highest ever, three times higher than a year ago.
  The delinquency rate for Internet banks has also increased. This is because the Bank of Korea (BOK)’s base interest rate has risen, and the interest on loans has increased. Not only that but there is also the problem of Internet bank emergency loans. An emergency loan is to give money without looking at a job or income, especially for those in their 20s and 30s with high delinquency rate. 
  What do college students think about loans? As liquidity has been strengthened compared to the past, it has become easier to borrow money. Therefore, even in their 20s, there has been a change in their perception that  “Let’s borrow this much because we lend it well.” Nevertheless, the debt issue among young individuals in their 20s and 30s is emerging as a potential ‘Time Bomb’ for the Korean economy. The delinquency rate of credit loans in their 20s and 30s doubled compared to the previous year, and half of individual rehabilitation debtors last year were in their 20s and 30s.

  Another reason people in their 20s are prone to debt is because of their low financial understanding. As an adult, loans are available, but they are not aware of the aftermath of loans due to their low level of financial knowledge. According to the ‘2022 Financial Comprehension Evaluation Results’ of the BOK and the Financial Supervisory Service, the overall adult financial comprehension score is 66.5. However, the score for those in their 20s was 65.8, the lowest except those in their 60s and 70s. As a result, there are calls for Korea to implement practical financial education as part of standard education, akin to systems in other countries.


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