A simple experimental design that varies the different features of a loan can teach us a great deal,
especially when we move out from simply rating the respondent’s interest in the loan to an estimate of how many
points in dollars the respondent is willing to pay to get the loan. The results can surprise. 1. No matter what the
repayment time, lower interest rates are clearly more attractive than high interest rates. 2. Some messages
increase interest in the loan, others decrease interest. 3. To maximize the points, increase the size of the loan (no
surprise here), increase the waiting time for repayment to begin, but avoid charging points for low FICO scores.
4. Men and women differ in how they respond to the terms of the offer. 5. Having a mortgage changes one’s
response to the loan offer. 6. The nature of one’s risk profile affects what’s important.
