Delinquency Priority in Consumer Credit: Evidence from Thai Microdata

Kanis Saengchote and Krislert Samphantharak

No 135, PIER Discussion Papers from Puey Ungphakorn Institute for Economic Research

Abstract: This study examines the question of how consumer prioritize default across products. We find that about a third of Thai individuals who face default decisions on mortgage and non-mortgage loans choose to default on mortgage loans first. As predicted by theory, their decisions are influenced by relative debt burden and amount of housing equity, consistent with both the ability to pay and the willingness to pay channels. We also find a puzzling result that borrowers who hold older mortgage loans are more likely to default on their mortgages; we hypothesize that this is perhaps related to refinancing.

Keywords: Mortgage Loan; Unsecured Debt; Delinquency Priority; Pecking Order (search for similar items in EconPapers)
JEL-codes: G21 G33 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2020-05
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Citations: View citations in EconPapers (1)

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