The rate difference between credit and home mortgage loans reached record high levels in April as lenders raised rates on money given out without collateral, the central bank said Monday.

   The Bank of Korea (BOK) said the difference in interest reached 1.79 percentage points in the cited month, up 0.10 percentage point from a month earlier. This, it said, is the largest difference tallied since related data was collected in September 2001.

   "The numbers reflect moves by local banks not to extend credit loans in the face of growing economic uncertainties and switch to more safer loans," the central bank said.

   Reflecting this, the average interest on credit loans, that do not require collateral, reached an average 6.67 percent in April, up 0.09 percentage point from the year before, and a gain of 0.86 percentage point from the end of 2010.

   The numbers represent the highest rate reached since 7.18 percent was recorded for December 2008.

   In contrast, interest on "safer" home mortgaged loans dipped 0.01 percentage point to an average of 4.88 in April.

   The BOK, meanwhile, said that difference in interest rates between conglomerates and small- and medium- sized enterprises widened to 0.61 percentage point in the cited month, which is the largest gap in 32 months.

Source: Yonhap News ( June 6, 2011)