Raising soldiers’ monthly pay to 1.5 million won for sergeants has also fueled temptations toward gambling and debt-financed investing, with loans from private lenders alone reaching 44.4 billion won

[Financial News] The number of service members who received debt restructuring while serving in the military topped 400 last year, as some struggled to repay debts incurred during service. Loans extended to soldiers by private lenders also exceeded 40 billion won.

According to the Financial Services Commission (FSC) on the 31st, 432 service members had debt restructuring finalized through the Credit Counseling and Recovery Service (CCRS) last year, including fast-track debt adjustment, pre-debt adjustment and individual workout programs. The amount of support reached 10.2 billion won. In 2023, 443 service members received 9.3 billion won in debt restructuring, and in 2024, another 443 received 10.6 billion won.
The amount borrowed from licensed private lenders was also significant. The outstanding balance of military loans from the top 30 moneylenders registered with the FSC stood at 44.4 billion won at the end of last year. As the financial assets directly managed and operated by service members have increased, the FSC said the risk of exposure to online gambling, high-risk investments such as virtual assets, illegal investment information and high-interest loans has also risen.
This year’s monthly pay for enlisted soldiers is 750,000 won for a private first class, 900,000 won for a corporal, 1.2 million won for a sergeant and 1.5 million won for a staff sergeant. If a service member deposits the maximum amount each month into the Military Service Members’ Tomorrow Preparation Savings Account for 18 months, the total including personal contributions, government support and interest can reach about 20.19 million won.
In response, the FSC held the second Financial Education Council meeting on the day and approved a plan to strengthen financial education for service members, prepared with the Ministry of National Defense, the Financial Supervisory Service and other related agencies. The key goal is to move away from one-way lecture-style classes and instead help service members review their own financial problems and find solutions themselves.
First, the government will expand one-on-one financial counseling for service members. Through non-face-to-face, always-available counseling channels and in-person counseling centers, advisers will provide tailored guidance on everything from salary and spending management to savings plans and lump-sum asset management. Service members with credit or debt problems will be able to check their current status online before receiving phone counseling, and those who find it difficult to disclose debt issues to others will be directed to a private bulletin board for service members operated by the CCRS.

Online gambling, so-called debt-financed investing, virtual assets, leveraged products and high-interest loans will be treated as separate risk factors. The financial investment industry will visit military units directly to teach real-world damage cases and response methods, while also offering investment and asset-management counseling. The government will also produce videos and teaching materials exclusively for service members on preventing illegal gambling losses and managing credit.
Gambling problems within the military are also coming to the surface. According to Republic of Korea Army Headquarters, 313 service members, including 20 officers and 293 enlisted soldiers, were booked by military police last year on suspicion of cyber gambling. The Ministry of National Defense is also considering introducing a voluntary reporting system that would reduce administrative and criminal penalties for service members who report illegal gambling on their own and connect them with recovery support from specialized agencies.
The government is also preparing incentives for service members who actively participate in financial education or maintain sound financial habits. It plans to award certificates, prize money and encouragement payments to those who perform well in financial quizzes or take part actively in classes. Officials also plan to discuss with related agencies whether maintaining the Military Service Members’ Tomorrow Preparation Savings Account until maturity can be used as a positive factor in personal credit evaluations.
Not only employees from banks and securities companies, but also practitioners such as analysts and private bankers (PBs) will take part in the education program. However, to prevent the classes from becoming a sales channel for financial products, the promotion or sale of specific products will be restricted.
Going forward, the government plans to tailor the curriculum to each stage of service. At the beginning of enlistment, the focus will be on financial fraud and loss prevention. In the middle of service, the emphasis will shift to building assets through saving and investing. As discharge approaches, the government will concentrate on how to manage accumulated funds and how to set future financial plans.
[email protected] Ahn Ga-eul Reporter