Lending Industry Adjusts Debts for 8,335 Vulnerable Borrowers in 2025... 72% Reduction Rate

A Fresh Start for 2,055 Due to Accidents or Illness, and 6,280 Facing Reduced Income or Unemployment

The Korea Credit Finance Association announced on June 9 that 52 of its member companies, which signed the "Voluntary Debt Adjustment Agreement for Lending Service Users," reduced the debts of 8,335 individuals by KRW 7.97 billion last year.

Sungwoong Jeong, Chairman of the Korea P2P Finance Association. Photo by Yonhap News.

The total principal and interest amounted to KRW 11.06 billion. The reduction rate was 72%, an increase of 12.2 percentage points compared to the previous year's 59.8%.

By category, debt adjustments for deceased borrowers accounted for the largest number, with 2,009 cases. Of the total debt amount of KRW 2.05 billion, KRW 2.02 billion, or 98.4%, was written off.

For accident victims, there were 46 cases, and KRW 1 billion (68.1%) out of a total debt of KRW 1.5 billion was forgiven.

Among borrowers facing economic hardship due to reduced income or unemployment, 6,280 individuals saw KRW 5.85 billion (66%) out of a total debt of KRW 8.86 billion relieved.

The debt adjustment results of approximately 2,600 member companies that did not join the agreement were excluded from this tally.

The Voluntary Debt Adjustment Agreement for Lending Service Users, which has been in operation since 2012, is a system that offers a repayment grace period of at least two months, suspension of collection, or principal and interest reduction in cases of overdue debt due to illness or accident.

In particular, if the borrower dies, at least 50% or all of the loan repayment amount is exempted.

Jung Sungwoong, Chairman of the Korea Credit Finance Association, stated, "There are limits to resolving the problem of illegal private financing through voluntary efforts by the industry alone," and added, "If a legal and institutional foundation is established, illegal private financing will also disappear."

This content was produced with the assistance of AI translation services.