Borrowing money – whether from informal or formal sources – is a common and fundamental aspect of our economic lives. Although evidence shows that people can exhibit strong emotional reactions to monetary debt, and that these emotions relate to their borrowing decisions, not much is known about which emotions are triggered and why. Here, we use the framework of social emotions to suggest that: (i) social emotions, in particular guilt, gratitude, and indebtedness, emerge in the context of borrowing in response to information about the costs to the lender and the benefits to the borrower, and the Welfare Tradeoff Ratios (WTRs) of both actors, (ii) varying WTRs in debt scenarios elicit the emotional responses predicted by the social emotions framework, and (iii) social emotions are related to borrowing decisions in hypothetical scenarios. We examine the role of social emotions in borrowing in three online studies with U.S. participants. Study 1 (N = 268) shows that social emotions emerge consistently in borrowing scenarios and respond to welfare tradeoffs. Study 2 (N = 190) suggests that the emotion of indebtedness can arise either from increases in guilt or in gratitude. Study 3 (N = 150) shows that people are willing to impose extra costs on themselves when making borrowing choices, presumably to decrease negative emotions. Taken together, the studies suggest that using the social emotions framework helps make sense of emotional responses to debt, and could further our understanding of borrowing and repayment decisions.

Debt

Borrowing

Welfare tradeoff ratio

Social emotions

Indebtedness

© 2025 The Authors. Published by Elsevier Inc.