IDEAS home Printed from https://ideas.repec.org/a/bla/jconsa/v52y2018i1p197-208.html
   My bibliography  Save this article

Incentives for Loan Repayments: Evidence from a Randomized Field Study

Author

Listed:
  • J. Michael Collins
  • Leah Gjertson
  • Justin Sydnor

Abstract

This field experiment tests an innovative approach for helping automobile loan borrowers make their loan payments on time. Borrowers were randomly assigned to a loan with an interest rate reduction after three on†time payments; borrowers assigned to this loan show fewer late payments compared to a control group. While the financial incentive of the interest rate reduction was small, the offer of a rate reduction appears to result in borrowers attending to due dates. This result illustrates that lenders can use simple mechanisms to encourage more positive repayment patterns among borrowers with a history of late payments.

Suggested Citation

  • J. Michael Collins & Leah Gjertson & Justin Sydnor, 2018. "Incentives for Loan Repayments: Evidence from a Randomized Field Study," Journal of Consumer Affairs, Wiley Blackwell, vol. 52(1), pages 197-208, March.
    • Handle: RePEc:bla:jconsa:v:52:y:2018:i:1:p:197-208
    DOI: 10.1111/joca.12142
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/joca.12142
    Download Restriction: no
    File URL: https://libkey.io/10.1111/joca.12142?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Burke, Jeremy, 2021. "Do prize-linked incentives promote positive financial behavior? Evidence from a debt reduction intervention," Journal of Public Economics, Elsevier, vol. 204(C).
    2. Campbell, Daniel & Grant, Andrew & Thorp, Susan, 2022. "Reducing credit card delinquency using repayment reminders," Journal of Banking & Finance, Elsevier, vol. 142(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jconsa:v:52:y:2018:i:1:p:197-208. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-0078 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.