Household loans issued by five major local banks shrank for the seventh straight month in July.

According to sources in the banking industry on Monday, the combined outstanding loans extended to households by five major lenders, KB Kookmin, Shinhan, Hana, Woori and NH Nonghyup, came to 697-point-76 trillion won as of July 28.

The figure marks a decrease of nearly one-point-89 trillion won, or zero-point-27, percent from a month earlier.

Industry insiders attributed the drop to improved loan repayment and a fall in new lending due to hikes in the interest rate.

The combined outstanding credit loans came in at 129-point-46 trillion won as of July 28, also down zero-point-93 percent from a month earlier.

Additionally, outstanding home-backed loans came to 506-point-three trillion won, a slight increase of zero-point-09 percent from the previous month.