This paper studies how future tense marking affects the terms of
bank loans. We predict that languages that grammatically mark the future affect
speakers’ intertemporal preferences and thereby reduce the perception of the
risks associated with loan issuance. We test this hypothesis on a sample of 2,601
bank loans from 20 European countries. We observe that the use of a language
with future tense marking is associated with lower loan spreads and lower
collateral use in loan contracts. The results corroborate Chen (American
Economic Review, 2013)’s hypothesis that future tense marking makes the future
more distant than the present. They suggest that linguistic structure affects
terms of loan contracts.