Outstanding household credit reached a record 2,019.8 trillion won (US$1.35 trillion) at the end of June, up 25.9 trillion won from three months earlier, according to preliminary BOK data released on Wednesday.
The increase was larger than the revised 14.8 trillion won gain in the first quarter and marked the biggest quarterly rise since the 34.8 trillion won increase recorded in the third quarter of 2021.
Household credit rose 3.6 percent from a year earlier and 1.3 percent from the previous quarter.
The BOK's household credit figure covers household loans and unpaid credit card purchases.
Household loans climbed 24.9 trillion won to 1,891.3 trillion won, while sales credit increased 900 billion won to 128.5 trillion won. Growth in housing-related loans accelerated to 12.2 trillion won from 8.1 trillion won, while other loans, including unsecured bank borrowing and credit extended by securities firms, more than doubled to 12.8 trillion won from 5.4 trillion won.
Other loans exceeded the increase in housing-related borrowing for the first time since the second quarter of 2021, when they rose 23.5 trillion won and 17.6 trillion won, respectively.
Kim Sung-jun, head of the BOK's financial statistics team, said housing-related and other loans each accounted for roughly half of the second-quarter increase.
The surge in other loans reflected stronger unsecured lending by banks and an unusually large increase in credit supplied by securities firms as buoyant equity prices encouraged leveraged investment.
Kim said the stock-market correction that began in the third quarter should help slow securities-related borrowing, suggesting part of the second-quarter jump may prove temporary.
The shift was also visible across lenders, with deposit banks adding 13.3 trillion won of household loans after a 200 billion-won decline in the first quarter, while lending by other financial institutions increased 8.6 trillion won from 5.5 trillion won.
Non-bank depository institutions added 3.1 trillion won, down sharply from 8.2 trillion won in the previous quarter, as tighter government loan-management measures restrained lending, Kim said.
The 2,000 trillion-won milestone is striking, but it does not by itself mean household leverage is rising faster than the economy.
Kim said the household-debt-to-nominal-GDP ratio had declined from 88.9 percent in the third quarter of 2025 to 88.1 percent at year-end and 85.3 percent in the first quarter of 2026, although second-quarter nominal GDP data are not yet available.
The government has meanwhile relaxed its aggregate household-loan growth guideline to 3 percent from 1.5 percent, potentially adding to credit supply after the second-quarter acceleration.
Kim said the effect of loans tied to relocation for redevelopment and reconstruction projects would take time to assess because those projects add housing supply only with a lag.
The BOK raised its base rate by 25 basis points to 2.75 percent in July, leaving policymakers to balance renewed asset-backed borrowing against the heavier debt-service burden that further tightening would impose on households.
For the central bank, the composition of credit may now matter as much as the headline total: even with the debt-to-GDP ratio drifting lower, a renewed flow of borrowed money into property and stocks can amplify asset prices and financial vulnerabilities.
AJP Takeaways
· South Korea's household credit reached a record 2,019.8 trillion won at the end of June 2026, rising 25.9 trillion won from the first quarter and exceeding 2,000 trillion won for the first time.
· Housing-related loans rose 12.2 trillion won, while other loans increased 12.8 trillion won and outpaced housing borrowing for the first time since the second quarter of 2021 amid strong property transactions and stock-market credit.
· The BOK said South Korea's household-debt-to-GDP ratio fell to 85.3 percent in the first quarter, but the renewed borrowing surge and the government's easing of its loan-growth guideline to 3 percent add to the policy trade-off after July's rate increase.
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