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It costs money to borrow money, but how much and for how long?

Minou van der Werf advocates applying insights from social psychology to financial behaviour. Even small practical interventions can help people to make sensible financial choices, Van der Werf discovered as a result of her field studies. PhD defence 10 December.

Minou van der Werf worked for the  National Institute for Budget Information (NIBUD) and wanted to find out whether you can encourage people to make sensible financial decisions using insights from social psychology. She carried out four field studies as part of her PhD research.  

Front cover of Minou van der Werf’s dissertation


At the Groningen Credit bank, Van der Werf studied how people with debts could keep their appointments better. She sent an SMS two days beforehand simply reminding people of their appointment: Dear Mr Smith, you have an appointment on this date, at this time, at this location. She was curious to find out whether this would help people to keep their appointments better, because people failing to turn up for their appointments – even if they were motivated to do so – was causing the municipality a lot of difficulties. ‘No-shows cost the municipality around an hour per client. Sending the SMS reminders cut the no-shows by half, from 12 to 6 per cent. That saves the municipality of Groningen around 4 ½ hours every week.’

Consumer credit

Van der Werf consulted the websites of credit providers to find out about the choices open to consumers with a personal loan. She found an overview of the monthly repayments, the period over which the payments have to be made and at the end of the overview the total amount. But, it occurred to Van der Werf that the effect might be different if the total amount were shown at the top. ‘On the website, the focus is on the amount that people have to pay every month. That can encourage people to think primarily of keeping the monthly costs as low as possible, but then they lose sight of the fact that the loan will be more expensive and that they will have to make the repayments for longer.’

Putting greater emphasis on the total amount meant that people opted for a shorter loan period. ‘Two months shorter repayment period may not be a lot; it’s just a minor effect, but the change to the website was also minor. If this can encourage people to make different loan choices, it says a lot about how important the layout of the website is.’

Students and DUO

Students choose a loan at the start of their studies, when they start to incur costs. Many students don’t look at their loan after that to see whether it still matches their needs, even though you can easily change your loan via DUO.nl with a couple of keyboard clicks. 'How can we make sure that students with a loan keep their eye on whether their current loan still suits their situation? To do that, you have to actively search the website for a calculation tool, while at the moment what students see most prominently is how much they’ll receive from DUO every month.’  Van der Werf wondered whether students would make different loan choices if you gave them more insight into the consequences of their loan. 

As part of this study, students were sent different letters at their home address. One of these was a letter that showed them their total study finance debt when they graduated and how much they would have to repay every month. They also learned how old they would be when they had paid off their loan. If students want to pay off their loan in monthly instalments over a period of 35 years, many of them will still be paying off the loan when they’re 60. By that time their own children have probably already graduated, Minou van der Werf explains. ‘That probably makes the consequences much more visible to students than simply telling them that they can pay their loan off over 35 years.’ The letter encouraged more students to modify their loans, and they also reduced the amount more often and by a larger amount.

Savings behaviour

One study did not generate any results. In this study Van der Werf looked at whether people could be helped to save by sending them messages over a longer period telling them how much they had saved and what they were saving for. The study did  generate insights into people’s behaviour with regard to saving and recommendations for future research.   


Minou van der Werf carried out her PhD research as an external PhD candidate, supervised by Wilco van Dijk, professor by special appointment and holder of the  NIBUD chair at Leiden University. Van der Werf has worked since February 2020 at the Institute of Psychology, in the department of Social, Economic and Organisational Psychology. She is manager and research at the affiliated Knowledge Centre for Psychology and Economic Behaviour (KCPEG).

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