The government and ruling Democratic Party(DP) have agreed to waive credit loan limits for major life events such as funerals and weddings.

The agreement was reached during a meeting between DP representatives on the parliamentary policy committee and Financial Services Commission(FSC) Chairman Koh Seung-beom on Monday.

They also agreed to exclude loans taken out for lump-sum residential rental deposits, called jeonse, from the fourth quarter household loan aggregate and to ensure that financial institutions effectively grant loans to those in actual need.

DP Rep. Kim Byung-wook said, however, that the participants all recognized the need to prepare for potential risks stemming from a key rate hike and the U.S. Federal Reserve's expected tapering.

During the meeting, the FSC chairman expressed concern over the rapid expansion of household debt amid the COVID-19 pandemic, further intensifying financial imbalance.