South Korea Weighs Curbs on Credit Loans to Active-Duty Soldiers as Debt Rises

According to Lianhe Zaobao citing The Chosun Ilbo, South Korea’s financial authorities are studying restrictions on loan companies’ credit lending to active-duty soldiers as “debt-laden discharges” become more common amid easier smartphone access and online borrowing. The report said a sergeant’s monthly pay rose to KRW 1.5 million this year from KRW 216,000 in 2017, making soldiers a key target for lenders. Debt adjustment amounts for South Korean service members increased to KRW 10.2 billion last year from KRW 5.6 billion in 2021. As of end-2025, the top 30 lenders’ outstanding soldier credit loans totaled KRW 44.4 billion, including KRW 24.2 billion for conscripted active-duty troops, or 54.5% of the total. A lender told the newspaper that soldiers can apply after three months of service for up to KRW 10 million at annual interest rates as high as 20%, the legal cap. The report also cited data showing 47,357 violations of mobile phone rules in the military from 2020 to 2024, including 1,612 cases involving online gambling. Financial Supervisory Service Governor Lee Chan-jin visited the Army’s Second Operations Command on July 8 to provide financial education to 250 troops, warning against gambling and high-interest loans. South Korea’s mandatory military service period is 18 months, the report said.