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I'm not following the logic. Assuming that I'm not loaning out all the money I have all the time, but rather if I have enough without any repayments to make tho
by karmakaze 3y ago
I'm not following the logic. Assuming that I'm not loaning out all the money I have all the time, but rather if I have enough without any repayments to make those 12 loans then defaulting one only loses one, not all. So just don't over-leverage.
- gizmo686 3y agoAn annualize interest rate of 250% for a 1 month term means a 1.08% actual interest rate. If just 8% of your loans default you lose money. A 70% default rate would mean that you expect lose 68% of your money every month. Sure, you don't go to 0. But you need a very high repayment rate for short term loans to work; and very difficult to interest your way out of the problem.