SEOUL, May 5 (Korea Bizwire) — Eight in 10 young people in their 20s who applied for personal rehabilitation took out loans from secondary financial institutions, including credit unions and savings banks, according to a survey released Wednesday.
The Seoul Financial Welfare Counseling Center conducted a survey of 512 young people in their twenties who completed the center’s financial guide program.
When they applied for personal rehabilitation, their debt per capita averaged 62.6 million won ($49,430).
Designed for people under the age of 29 among those who have applied for personal rehabilitation, this program helps them to shorten the repayment period if they follow individual financial counseling based on the recommendation of the court.
Of the respondents, 78%, or 400 people, had loans from non-bank institutions, followed by 76% (388) with credit card loans and 72% (370) with bank loans.
Another 54% (277 people) said the amount of their debts had exceeded their ability to repay during the process of paying off other debts, while 63% (313 people) said they had paid off debts by taking out additional loans for fear of becoming the credit delinquents.
About half of the respondents had an average monthly income between 1 and 2 million won, followed by 45% (230) who had an average monthly income between 2 and 3 million won.
About two-thirds of respondents (346 people) had permanent jobs, but the share of those with more than three years of service remained low at 19%, indicating a lack of job security for many.
M. H. Lee ([email protected])