As soldiers’ salaries have risen sharply in recent years and regulations on the use of smartphones in military barracks have been relaxed, access to online lending and illegal gambling platforms by soldiers on active duty has increased significantly. Today, South Korea’s active duty soldiers have become the focus of the credit market marketing target, many 20-year-old service youth are mired in debt, “Debt discharge” chaos growing.
South Korea’s Chosun Ilbo newspaper reported on July 8 that the figures show, the monthly salary of a South Korean sergeant-in-chief, the highest rank for conscripts, rose from 216,000 won (1,000 won) in 2017 to 1.5 million won this year.
According to a report by South Korea’s Donga Daily, data from the South Korean Financial Supervision Institute shows that by the end of 2025, the outstanding military credit loans of 30 head loan companies in South Korea reached 44.4 billion won, among them, 24.2 billion won, or 54.5 percent, were loans to conscripts.
The original intention of the salary increase was to improve soldiers’ service treatment and help them reserve funds for life after they leave the military, but due to loopholes in financial regulation and targeted marketing by private lending platforms, the report said, instead, the soldiers’ pay has become what lenders call a stable“Repayment guarantee”.
According to the Chosun Ilbo, some of these companies have set very low standards for active-duty soldiers. Soldiers can apply for a loan of up to 10m won, at an annual interest rate of up to 20 per cent, after only three months in the army. At the same time, all kinds of“Loyalty loan”, “Loan” and other soldiers exclusive high-interest loan ads can be seen everywhere in the network platform. According to the report, a 20-year-old conscript in South Korea took out a loan of 18 million won after seeing the publicity in the virtual currency investment community.
The relaxation of smartphone controls in the barracks has made it easier for soldiers to access various forms of lending and gambling. Between 2020 and 2024,47,357 cases involving illegal use of mobile phones in the South Korean military were punished, including 1,612 cases involving online gambling, the report said.
South Korea’s government is studying new rules to curb the ability of lenders to extend credit to service members.
But there are also concerns that with formal lending channels restricted, some soldiers may turn to illegal private lending channels with higher interest rates and greater risks, and face an even bigger debt trap.