“Borrowed 3 million won, and it snowballed” ... Popular girl-group member opens up about “juggling card loans”

[Financial News] As the balance of card-loan refinancing—long-term card loans taken out to repay existing card loans, often seen as a last-resort source of emergency funds for ordinary people—rises sharply, an entertainer who was a member of a popular girl group has revealed that she, too, was shut out of first-tier financial institutions and fell into a vicious cycle of juggling high-interest card loans, laying bare the financial realities facing vulnerable borrowers.
According to financial industry sources on the 12th, the balance of “card-loan refinancing”—taking out a new card loan to cover one that cannot be repaid—stood at 1.6953 trillion won at the end of August. That was a 22.7% surge from 1.3817 trillion won at the end of last year. Over the same period, the balance of payment-based revolving credit, in which cardholders pay only part of their bill and carry the rest forward, also rose 4.2%, from 6.7201 trillion won to 6.9994 trillion won.
This growth in financially constrained borrowers relying on card loans is particularly pronounced among young unemployed people or freelancers, whose employment is often unstable. Noh Ji-sun, a former member of the girl group fromis_9, appeared on a YouTube channel the previous day and spoke about her failed attempt to obtain a loan and her use of card loans immediately after her idol activities ended.
Noh explained, “After my activities ended, I looked into getting a bank loan because I needed to make a living right away. But because the service contract was similar to those used for workers in special forms of employment, I was classified as unemployed and without income, and was completely shut out of loans from first-tier financial institutions.” She added, “When I was offered 3 million won right away, I borrowed it without having time to think about the interest rate. But I kept taking out additional loans as my limit increased to cover the principal and interest on my existing debt, and the debt snowballed.”
Noh added that, with help from her older brother and income-generating work, she repaid her card loans in full and rebuilt her credit score within a year of leaving the group. But many vulnerable borrowers end up with multiple debts or fall behind on payments after repeatedly borrowing to repay existing loans.
Financial authorities and experts are watching the “balloon effect”: amid an economic slowdown and a prolonged high-interest-rate environment, tighter lending restrictions at commercial banks, focused on high-credit borrowers, are pushing young people and freelancers who struggle to prove their income toward card loans from second-tier financial institutions.
In a recently released report on the financial stability situation, the Bank of Korea (BOK) pointed out that “concerns about asset quality in the credit card sector are also growing as card lending increases, with borrowers with medium and low credit ratings accounting for a large share.” The warning is that rising card-loan and revolving-credit balances not only increase the risk of financial institutions’ insolvency but also raise vulnerable borrowers’ interest-payment burden, potentially becoming a ticking time bomb for household debt.
[email protected] Moon Young-jin Reporter