In December days are shorter but loans are cheaper

Jérémie Bertrand and Laurent Weill
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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

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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.

Date: 2022-07
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Published in Economic Inquiry, 2022, 60 (3), pp.1335-1356. ⟨10.1111/ecin.13075⟩

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Related works:
Journal Article: In December days are shorter but loans are cheaper (2022)
Working Paper: In December Days are Shorter but Loans are Cheaper (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03703986

DOI: 10.1111/ecin.13075

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