Borrowers frustrated over expanded debt relief for low-income earners

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By Lee Kyung-min

• Published Jan 13, 2026 2:55 PM KST

When Seoul office worker Lee Jun-ho, 40, learned that some low-income borrowers could have debts of nearly 50 million won written off after repaying only a fraction — as little as 2.5 million won — his reaction was not relief but frustration, a sentiment shared by many working professionals.

“It felt like punishment for trying to hang on, meeting monthly interest payment and saving money to repay the principal,” he said.

He took out the loans and has since made his payments diligently.

“I work full time, wear a suit every day, and still owe what I owe. But because I’m not classified as ‘vulnerable,’ I get zero relief? I’ve never defaulted. I'm just working hard to survive. Now I see headlines like that and it makes me question whether it is worth it at all.”

Lee has a mortgage and credit card loans, not to mention his wife and two children to support.

“My salary looks fine on paper, but after monthly interest, living expenses and everything, there’s nothing left,” he said. “People like me are invisible in this system. We’re too ‘normal’ to qualify, I guess, but that doesn’t mean we are not struggling.”

Similarly, Han Jung-min, a salaried worker in his late 30s, said the news left him stunned for a moment, caught between disbelief and anger.

“I don’t have anything against helping those less fortunate,” he said. “But I speak for every tax-paying salaried worker when I say something’s not right if someone with no income can have tens of millions wiped clean, when others working full time are stuck paying interest forever. It makes you question what fairness means," Han said.

“I’m not asking for everything to be erased,” he said. “I just don’t want working people with massive debts to be implicitly told that they should fail to deserve help.”

Their collective frustration comes as the country’s financial authorities unveiled what they call a historic expansion of debt relief for low-income and socially vulnerable borrowers — measures that critics say still leave a large group of heavily indebted working borrowers out in the cold.

The Financial Services Commission (FSC) plans to sharply raise the ceiling for “liquidation-type debt restructuring,” a program that forgives remaining debts if the borrower partially repays them.

Under the new rules, the eligible principal amount will rise from 15 million won to 50 million won.

The program applies to borrowers in the lowest 20 percent of income earners, as well as adults aged 70 or older who meet certain conditions.

In effect, a borrower with an original principal of 50 million won could have the remaining balance written off after repaying just 2.5 million won, or 5 percent.

The FSC estimates the number of beneficiaries will increase to roughly 20,000 a year, up from about 5,000.

Last December, 1.1 trillion won in debts held by 70,000 borrowers in the lowest income brackets and people with severe disabilities was written off.