/ Modified sep 28, 2021 11:26 a.m.

Writing style might spell the difference between success and failure when applying for a loan

University of Arizona researchers found that deception cues are evident in applications that receive unfavorable responses from investors.

typing keyboard Typing on a computer keyboard.

Your writing style might spell the difference between success and failure when applying for a financial loan.

That’s according to researchers who found readability, positivity and honesty are major factors in borrowers’ ability to get loan approval.

University of Arizona Eller College of Management professor Rick Sias co-authored a study that looked at the writing style of potential borrowers appealing to investors.

“How can somebody who is a good credit risk signal to potential investors that they are a good credit risk and writing style, we find, is one of those ways," he said.

Sias notes borrowers whose writing was more readable received responses offering lower interest rates. Borrowers whose style included indications of deception — like using personal pronouns "he" and "she" instead of "I" and "we" — were charged higher rates from lenders.

The research will be published in an upcoming issue of the Journal of Financial and Quantitative Analysis.

By posting comments, you agree to our
AZPM encourages comments, but comments that contain profanity, unrelated information, threats, libel, defamatory statements, obscenities, pornography or that violate the law are not allowed. Comments that promote commercial products or services are not allowed. Comments in violation of this policy will be removed. Continued posting of comments that violate this policy will result in the commenter being banned from the site.

By submitting your comments, you hereby give AZPM the right to post your comments and potentially use them in any other form of media operated by this institution.
AZPM is a service of the University of Arizona and our broadcast stations are licensed to the Arizona Board of Regents who hold the trademarks for Arizona Public Media and AZPM. We respectfully acknowledge the University of Arizona is on the land and territories of Indigenous peoples.
The University of Arizona