Home-Backed Loans at Kakao Bank Become 'As Hard as Reaching for Stars' Amidst Morning 'Open Runs'

Securing a home-backed loan, known as 'Joodamdae' in South Korea, has become increasingly difficult, with applicants rushing to Kakao Bank only to find applications closed within minutes of opening. The phenomenon, often referred to as an 'open run,' highlights the intense demand for these loans.

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It closed in a few seconds.

Recent data shows that Kakao Bank's applications for home-backed loans are consistently closing by midday, and sometimes even within seconds of opening. This trend marks a return to the intense demand seen earlier in the year, after a brief period of stabilization. Online communities are filled with user testimonials detailing their failed attempts to apply, with some reporting that the application window closed mere seconds after it opened at 6 a.m.

Industry experts attribute this surge in demand at internet-only banks like Kakao Bank to the tightening lending policies of traditional commercial banks. As major banks heighten their scrutiny and reduce their loan offerings to manage overall household debt, borrowers are increasingly turning to internet banks, which have historically had less stringent regulations.

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There is no room even with high housing demand.

However, even internet banks are facing limitations. Kakao Bank operates with a daily application limit, and the rapid exhaustion of this quota means new applications are halted. This situation is creating significant concern for prospective homebuyers who find their options for financing shrinking rapidly. The number of available loan channels is diminishing as banks prioritize managing their loan volumes, leading to a bottleneck for essential borrowers.

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The application deadline has been moved up from the afternoon to the morning.

Despite the high customer interest, Kakao Bank stated that it is adhering to its loan volume management policies. The bank's outstanding home-backed loans showed a modest increase of 266 billion won in the second quarter compared to the previous year, and even a decrease of 300 billion won from the prior quarter. A Kakao Bank representative confirmed that while customer interest is high, the bank's capacity for new loan supply is limited, and operations remain within the established total loan volume targets.

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The number of choices for actual borrowers has significantly decreased.