Scientists from the National University of Singapore found out: debts hit the psyche of borrowers hard.
Every third person in the world has a loan. But for some it is a consumer loan taken to buy an expensive computer, and for others it is a multi-year mortgage. However, according to the staff of the Research Center for Social Security at the National University of Singapore, any debt severely “hits” the psyche, weakens the will of a person and leads to a decrease in his cognitive abilities. Moreover, a person who has been in a state of debt for a long time loses a sense of the importance of long-term projects, cannot objectively assess situations, look at them from the outside, and calculate the correctness of life strategies.
Moreover, the creditor falls into such a "poverty trap" very quickly. Taking a loan, a person literally “fades” in 2-3 months. People burdened with liabilities to banks "hamper" their health, postponing the visit to the doctor as long as possible, increasingly opt for cheap products.
To prove this, Singaporean researchers conducted a study in which they interviewed 200 low-income people before and three months after they were written off a debt of five thousand Singapore dollars. This equaled approximately the average three-month income of the participants in the experiment. But here it should be noted that despite the fact that people had an equal debt account, initially the amount of debt was different for everyone, so after receiving a grant, someone's financial situation turned out to be better, while someone else's was slightly worse. And the types of loans were different. Someone had mortgage debt, consumer debt, or student debt.
So, scientists measured basic health indicators (blood test, blood pressure, body mass index, etc.) and found that those who took out a loan for education not only stabilized their pressure faster, but also the level of needs after repayment of the loan increased by almost twice. They were already choosing between 2-3 promising job offers and were ready to pay for additional training and services. Those who took out consumer loans came to their senses a little longer, and mortgage holders were the hardest to recover. Scientists measured another six months later, and only then did housing debtors begin to demonstrate an increase in performance in passing intelligence tests, sleep stabilized, and increased anxiety went away.
Plus, after debt relief, the average rate of mistakes participants made on intelligence tests dropped from 17% to 4%. In addition, people began to make mistakes in their financial decisions less often, to value short-term profit less, giving preference to long-term goals - in this case, the error rate dropped on average from 44% to 33%.
They also have a sharp decrease in the need for petty impulsive shopaholism - this is when you want to buy at least something cheap in order to please yourself with at least something. Also, after people closed their loans, the mental state of the participants improved - if before writing off debts, the average level of anxiety of people was 78%, then after easing the debt burden, it fell to 53%.
Singaporean scholars believe that their study refutes the notion that the poor are in debt because of their laziness or lack of collection. It's all about changing the way the brain works.
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“Our research shows that because debt disrupts mental health and decision-making, it is incredibly difficult for even highly motivated and talented people to break out of poverty,” explained one of the authors, On Kiyan, quoted by The Daily Mail. - In order to do this, you need to have either super-abilities or super-luck. It is very difficult to be poor, more difficult than we think."
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