Bank lending rates on new household loans dropped from a month earlier in April, while interest paid on new deposits remained unchanged, central bank data showed Monday.

The average interest rate on fresh household loans extended by local banks came to 3.17 percent last month, down 0.07 percentage points from the previous month, according to the Bank of Korea.

The drop followed two consecutive months of increase and came ahead of what many believe to be an imminent U.S. rate hike in June that could prompt interest rates here to go up.

The decline, however, could also prompt additional household borrowing, which had reached a record high of 1,223.7 trillion won ($1.03 trillion) as of end-March.

The average interest rate on new home-backed loans came to 2.93 percent in April, down from 2.97 percent the previous month, according to the BOK.

The average interest rate on all new loans slipped 0.06 percentage points over the cited period to 3.44 percent as the rate on new corporate loans came to 3.55 percent, down 0.05 percentage points from the previous month.

On the other hand, the average interest rate paid by banks on new deposits remained unchanged from a month earlier at 1.56 percent, narrowing the gap between the interest rate paid to and by local banks to 1.88 percent. (Yonhap)