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In December days are shorter but loans are cheaper

Author

Listed:
  • Jérémie Bertrand

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

  • Laurent Weill

    (EM Strasbourg - École de Management de Strasbourg = EM Strasbourg Business School)

Abstract

This study analyzes the month-of-the-year effect on lending decisions. Using data from a large US peer-to-peer lender, we perform regressions of loan acceptance and loan rate on month dummy variables. We find evidence of a month-of-the-year effect on loan acceptance and loan pricing. December is the best month to ask for a loan, with the highest chance of acceptance and the lowest rate. We test the potential explanations of the calendar anomalies and find some support for trade loading, such that granted loans might be inflated at the end of the quarter to hit quarterly targets.

Suggested Citation

  • Jérémie Bertrand & Laurent Weill, 2022. "In December days are shorter but loans are cheaper," Post-Print hal-03703986, HAL.
    • Handle: RePEc:hal:journl:hal-03703986
    DOI: 10.1111/ecin.13075
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    Cited by:

    1. Choudhary, Priya & Thenmozhi, M., 2024. "Fintech and financial sector: ADO analysis and future research agenda," International Review of Financial Analysis, Elsevier, vol. 93(C).

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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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