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Impacts of Loan Communication on Young Adults’ Borrowing

  • Jonas NilssonEmail author
  • Jeanette Carlsson Hauff
Chapter

Abstract

Against the backdrop of an increasing problem of over-indebtedness among young adults, the potential of communication as a means to promote a more responsible borrowing behavior is explored. We first analyze the ability of young borrowers to interpret given loan information. Our findings show that it seems difficult for young adults to accurately calculate what they can afford when only being exposed to an overall cost. We also find that the level of loan literacy had a distinct positive impact. Second, we focus on the impact of the format of the presented information on borrowing behavior and conclude that the use of narratives may have a limited impact on borrowing behavior.

Keywords

Mortgage loans Loan decision Financial communication Transparency Narrative format 

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  1. 1.School of Business, Economics and LawUniversity of GothenburgGöteborgSweden

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