Household loans offered by South Korean depository institutions posted the highest growth in 11 months in October on home loans, the central bank said Friday, complicating the government’s efforts to curb private sector debt.

Household lending handled by local banks and non-bank institutions totaled 634.3 trillion won ($548 billion) as of the end of October, up 5.7 trillion won from the previous month, according to the Bank of Korea.

The October data marked the largest monthly expansion since a 6.6 trillion won on-month gain tallied in November 2010.

Despite state regulator‘s measures to stem home debt, household credit has grown steadily, spawning concerns that high indebtedness will affect consumer spending and hurt economic growth.

Household credit, which includes loans and credit purchases, stood at 892.5 trillion won as of the end of September.

Analysts said the increase in the growth of credit loans is troubling as it indicates more people are relying on borrowing at higher interest rates to cover their rising living costs.

Banks’ household loans, including home-backed lending, grew by 3.2 trillion won on-month to 452.8 trillion won as of the end of October, up from a 600 billion won gain the previous month, the central bank said.

Banks‘ mortgage lending grew 2.4 trillion won to 301.9 trillion won and their credit loans expanded 1 trillion won to 147.4 trillion won.

Total household loans from non-bank institutions reached 181.5 trillion won as of the end of October, up 2.5 trillion won from September, it added. Their non-housing loans grew 1.7 trillion won to 100.5 trillion won, compared with a 200 billion won monthly fall in September.

The BOK froze the key interest rate at 3.25 percent for the sixth straight month in December as Europe’s debt crisis increased downside risks to economic growth. (Yonhap News)