Ranyard, R, McHugh, S and McNair, S orcid.org/0000-0003-3111-234X (2017) The psychology of borrowing and over-indebtedness. In: Ranyard, R, (ed.) Economic Psychology. Wiley , Chichester, UK , pp. 222-238. ISBN 9781118926345
Abstract
This chapter first reviews research on the psychology of borrowing, beginning with an outline of changes in borrowing over the years. It then draws on Kamleitner and Kirchler's three-stage model of the borrowing process, and presents theory and research on the determinants of personal borrowing (stage 1), credit choice processes (stage 2), and subsequent repayment strategies (stage 3). The chapter examines the causes and psychological consequences of over-indebtedness, and also considers the policy implications of the research reviewed. A growing body of research has shown that being in debt can lead to significant psychological detriment, including depression, stress and anxiety. The reviewed research suggests that helping students to understand credit cost measures such as annual percentage rate of interest (APR) may be particularly important. One way to do this would be via the teaching and learning of an approximate APR formula, essentially drawing attention to APR's relation to the average, rather than the initial loan.
Metadata
Item Type: | Book Section |
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Authors/Creators: |
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Editors: |
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Keywords: | borrowers' repayment strategies; credit choice processes; credit cost measures; financial education; financial exclusion; over-indebtedness; personal borrowing; psychological consequences; psychological detriment |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Management Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 10 Feb 2017 12:10 |
Last Modified: | 11 Sep 2017 15:14 |
Status: | Published |
Publisher: | Wiley |
Identification Number: | 10.1002/9781118926352.ch14 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:101133 |