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In December Days are Shorter but Loans are Cheaper

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  • Jérémie BERTRAND

    (IESEG School of Management)

  • Laurent WEILL

    (LaRGE Research Center, Université de Strasbourg)

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 spread on month dummy variables, including a large set of borrower and loan control 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 spread. Loan applications have the lowest chance of acceptance in January while loan pricing is highest in August and September. 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, 2020. "In December Days are Shorter but Loans are Cheaper," Working Papers of LaRGE Research Center 2020-02, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    • Handle: RePEc:lar:wpaper:2020-02
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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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    More about this item

    Keywords

    Fintech; calendar anomalies; loan.;
    All these keywords.

    JEL classification:

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

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