THE IMPACT OF INTEREST RATE, GROSS DOMESTIC PRODUCT AND DEBT-TO-INCOME RATIO ON DEBT MANAGEMENT
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Universiti Malaysia Sarawak (UNIMAS)
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The purpose of this study is to examines the impact of interest rate, gross domestic product (GDP), and debt-to-income ratio on debt management practices among students and staff at Universiti Malaysia Sarawak (UNIMAS). Grounded in behavioral finance and financial literacy theories, the research identifies critical factors influencing personal debt management within a university setting. The study employs a mixed approach, utilizing primary data collected via structured surveys targeting 300 respondents and secondary data on Malaysia's macroeconomic indicators obtained from the World Bank. Findings reveal that interest rates and GDP have weak, insignificant effects on debt management, while the debt-to-income ratio shows a slightly stronger link. Respondents who compare loan options and manage loans well tend to have lower debt burdens. This suggests personal financial behavior plays a more crucial role than macroeconomic factors, highlighting the need for financial literacy programs to support responsible borrowing in university communities.