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Stream/Area:
-
Subject:
-
Paper ID:
IJSREM68239
Volume:
10 |
10 |
Oct 2026
Pages:
1-9
Publication Frequency:
Monthly (12 issues per year)
License:International Journal of Scientific Research in Engineering and Management follows the Creative Commons Attribution 4.0 (CC BY 4.0) License, allowing free use and distribution with proper attribution.
Department of business administrastration
K L UNIVERSITY
BBA Department,
KLEF, Vaddeswaram (Guide).
Financial literacy has the potential to impact financial borrowing decisions, the awareness of financial costs, and financial repayment. Having an understanding of the workings of interest rates, loan terms, equated monthly instalments (EMI), repayment dates, penalties, and credit scores will help consumers plan for their loans and fulfill their obligations. However, merely having financial awareness is not enough to ensure frequent repayments as income, age, education, loan amount and other personal factors can play a role in determining a borrower's choice. This study examines the association between financial literacy and individual borrowers' loan repayment behaviour. It takes into account borrowers' knowledge of financial principles and their repayment history including timely EMI payments, planning for scheduled payments and ensuring payments are not done late, thereby avoiding late payment penalties. Some demographic and loan specific factors are also taken into account. Why this topic is important: Better financial information and financial knowledge will likely result in more informed borrowing, a better ability to manage repayments, and healthier credit practices, and it is important to borrowers, lenders and policy makers. The study seeks to make a contribution to the financial education and awareness campaigns and programs to facilitate responsible loan management. This study aims to explain the loan repayment behaviour of borrowers by analyzing their financial literacy, credit risk, and some other factors. The purpose of the study is to determine the loan repayment behaviour of borrowers by analysing the financial literacy and credit risk of the borrowers and other factors.
KEYWORDS
This study looked into the relationship between financial literacy and loan repayment behaviour of individual borrowers. The findings of chi-square, ANOVA and regression analysis all indicate that financial literacy is related to repayment outcomes. Those with higher literacy scores were more likely to report paying on time and had higher repayment-behaviour index scores. The association was also present when demographic and loan characteristics were controlled for. The study does not prove causality, but did indicate that practical financial education may enable borrowers to make more informed credit choices, to plan their repayment more effectively and to be able to borrow more sustainably.
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Publication Date
10/23/2026
Peer Review Type
Double-Blind Peer Review
Review Rounds: 2
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Conflict of Interest
The authors declare no conflict of interest related to this research work.
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