CONSUMERS who have racked up debt are more likely to make paying back their bank their first priority before tackling other loans, according to a new study.

DP Credit Bureau (DPCB), which conducted the study, said consumers tend to fall behind when repaying non-bank debt first because 'many believe non-bank lenders will be less vigilant in pursuing late payments or take steps to end the line of credit', said Ms Chen.

The study also found that younger people tend to get into debt more than older folk.

This study is the first in Singapore to compare bank and non-bank debt repayment to establish a link between the failure to pay a debt owed to a business and a default on a bank loan.

This data is then used by banks to identify customers who are likely to fall behind in their repayments, said DPCB.

The study showed that 32.5 per cent of consumers slow in repaying debts to a business will fall behind in their bank loans within seven months.

This indicates that when consumers get slow in paying minor debts, they eventually have trouble paying off larger ones, said DP Credit Bureau.

The study, based on payment records of more than 600,000 individuals provided by DP Credit Bureau's members, covered the period from last July to February - when the effects of the global economic downturn were felt.

Non-bank lending data came from a range of industries offering credit loans to consumers, including retail, credit co-ops, education providors and leasing companies.

The study also showed that 44 per cent of those who fell behind on repayments were aged between 26 and 35.

Read the full report in Wednesday's edition of The Straits Times.