Modeling the Impact of Macroeconomic Variables on Personal Loan Applications and Approvals Before and During the COVID-19 Pandemic

This study investigates the association between personal loan applications and approvals and macroeconomic variables, including bank interest rates, the consumer price index (CPI), and employment and unemployment figures, both prior to and during the COVID-19 pandemic. Data spanning January 2018 to June 2022, were utilized for the analysis. Two analytical techniques were employed: the correlation matrix and the multiple linear regression model. The correlation analysis revealed strong relationships between the CPI and employment figures, as well as between interest rates and unemployment, in their association with both loan applications and approvals. Results from the regression model indicated that bank interest rates and employment status significantly influenced personal loan applications, regardless of the pandemic context. With respect to loan approvals, the findings demonstrated that bank interest rates, unemployment, and the CPI exerted significant effects, particularly in regions severely affected by COVID-19. These results highlight the critical role of macroeconomic conditions in shaping lending behavior and provide insights into the interaction between financial markets and economic shocks.