Loan forbearance takeup in the Covid-era - The role of time preferences and locus of control.

During the COVID-19 pandemic, many countries eased the burden on borrowers through loan forbearance. Using a representative sample of the Hungarian adult population, we investigate whether time preferences and locus of control are associated with loan forbearance takeup. We find evidence that time discounting correlates with the resort to forbearance: ceteris paribus, more patient individuals are less likely to take up forbearance, even after controlling for their present/future bias, risk aversion, locus of control, demographic characteristics, educational level, financial status, and the effects of the pandemic. However, present bias and locus of control are not significantly associated with loan forbearance.