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Overdraft borrowing jumps as investors chase KOSPI rally
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By
Jun Ji-hye
Published
May 11, 2026 2:06 pm
KST
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Park, 35, an office worker living in Mapo District, Seoul, recently transferred 20 million won ($13,600) from his overdraft account to a brokerage account to buy shares of SK hynix.
Watching semiconductor stocks leading the KOSPI rally surge higher, he said, “I felt anxious that if I kept waiting, prices would climb even further. It was difficult to time investments with just my salary, so I eventually turned to my overdraft account.”
Another office worker in her 40s living in Seongnam, Gyeonggi Province, also recently withdrew around 10 million won from her overdraft account.
“While deposit and savings rates have fallen, I keep hearing people around me talk about profits from stocks,” she said. “It wasn’t so much that I was short on living expenses, but rather that I didn’t want to miss out on investment opportunities.”
She also invested part of the withdrawn funds in shares of Samsung Electronics and SK hynix.
As of last Thursday, personal overdraft loan balances at the country’s five major banks — KB Kookmin, Shinhan, Hana, Woori and NH NongHyup — totaled 40.5 trillion won, up 715.2 billion won from three days earlier.
The outstanding balance climbed to its highest level since January 2023, while the pace of monthly growth marked the sharpest increase since October 2023, suggesting a surge in demand for readily available cash.
An overdraft account allows customers to borrow money flexibly within a preset credit limit and repay it at their convenience. Due to its simple application process and the fact that interest is charged only on the amount used and the borrowing period, the product is widely used by salaried workers seeking short-term cash.
Market watchers say the borrowing spree appears to be linked to the KOSPI’s recent record-breaking rally, as investors rush to avoid missing out on further gains amid intensifying FOMO, or “fear of missing out,” sentiment.
A clearer shift of funds from banks into the stock market is also emerging. Demand deposit balances at the country’s five major banks, which are considered highly liquid funds waiting to be invested, stood at 696 trillion won as of last Thursday, down 501.3 billion won from the end of April.
Kim Yu-mi, an analyst at Kiwoom Securities, said Korea’s financial market is showing clear signs of a structural shift in liquidity flows, with funds increasingly moving out of traditional savings deposits and into more liquid products.
“The trend indicates ample liquidity has built up in the market compared with previous years, suggesting there is a growing pool of standby capital that could flow into equities and become a meaningful support factor for the stock market once investor confidence strengthens further,” she said.
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