Financial authorities will launch an on-site inspection later this week targeting business loans believed to have been misused by speculators.

According to officials Wednesday, the Financial Supervisory Service plans to probe banks to look into whether they are complying with tougher lending criteria introduced by the government last year to rein in the housing market and growing household debt.

Officials at the Financial Services Commission said with tighter limits on mortgage loans, some speculators are believed to have used non-mortgage loans, including loans for business purposes, to buy homes in Seoul.

Last month, household lending grew by four-point-eight trillion won, marking the slowest monthly increase since March. But loans for business purposes rose by two-point-five trillion won in July, marking the sharpest gain since March.

If loans for businesses are found to have been used to buy homes, financial authorities will order borrowers to repay such debts and even ban them from taking out of new loans.

Authorities will also look into whether loans for the lump-sum deposit home rental system known as "jeonse" were used in real estate speculation.