Youth Tap Low-Interest Loans for 'Debt Investing' Amid Stock Market Rebound Hopes
As expectations for stock price increases grow, cases are rising where young people, including university students, are using low-interest loans — such as student loans or living expense loans at an annual rate of about 1.7% — for investments in stocks and cryptocurrencies. This has emerged as instances of utilizing loan systems, originally intended for academic support, for purposes contrary to their original intent.
According to data from the Korea Student Aid Foundation, the scale of living expense loans supplied surged from 545 billion won in 2021 to 850.6 billion won in 2025. The volume of overdue living expense loans also nearly doubled, increasing from 19.2 billion won in 2021 to 38.7 billion won in 2025.
Amid increasing volatility in the stock market, the so-called 'debt investing' — using borrowed money for investments — is showing signs of spreading again. A sentiment viewing market downturns as opportunities is forming, leading to an increase in leveraged investments, but the risk of losses due to market fluctuations is also growing. Currently, the balance of margin loans is nearing approximately 32 trillion won, with the scale of forced selling against unpaid balances recorded at 82.4 billion won.
Senior Research Fellow Kang So-hyun from the Korea Capital Market Institute analyzed that young people face a high risk of incurring losses they cannot bear when market volatility increases if they invest using loans or credit, emphasizing the need to strengthen financial education. Professor Kim Sang-bong of Hanyang University's Economics Department also diagnosed that investments using loans are difficult to sustain when market volatility escalates.
Meanwhile, the number of subscribers to Individual Comprehensive Asset Management Accounts (ISA) has surpassed 8 million, with accumulated subscription amounts reaching 54 trillion won. Analyses suggest that if the stock market experiences a sharp decline, forced selling due to investment losses can occur, leading to further price drops. The failure of investments by young people with insufficient capital can connect not only to personal credit issues but also to an increase in social costs.