Digital Debt and Psychological Well-Being among Young Adults: A Case Study of Jharkhand
DOI:
https://doi.org/10.66635/6tpmgv71Keywords:
Digital Debt, Digital Lending, Financial Stress, Psychological Well-Being, Financial Literacy, Young Adults, JharkhandAbstract
The rapid growth of digital lending platforms has significantly transformed access to credit among young adults in India. While digital loans have improved financial inclusion by providing quick and convenient access to funds, concerns have emerged regarding the financial and psychological consequences of excessive borrowing. The present study examines the relationship between digital debt and psychological well-being among young adults in Jharkhand. Specifically, the study investigates the influence of digital debt burden on financial stress and psychological well-being while also assessing the moderating role of financial literacy.
The study is based on primary data collected from 432 young adults aged between 18 and 35 years who had availed at least one digital loan during the preceding two years. Data were collected using a structured questionnaire and analysed using descriptive statistics, reliability analysis, correlation analysis, multiple regression analysis, moderation analysis and mediation analysis. The findings reveal that digital debt burden significantly increases financial stress and psychological distress among borrowers. Financial stress emerged as a strong predictor of psychological distress and was found to partially mediate the relationship between digital debt burden and psychological well-being. The results further indicate that financial literacy reduces the adverse psychological effects of digital debt by enabling borrowers to make more informed financial decisions and manage debt more effectively. Repayment difficulties were also found to significantly contribute to psychological distress.
The study concludes that although digital lending enhances financial accessibility, excessive dependence on digital credit can create substantial financial and psychological vulnerabilities. The findings highlight the importance of responsible lending practices, borrower protection measures and financial literacy initiatives in promoting sustainable financial behaviour and improving the overall well-being of young adults.
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