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Yes. After a quick look at this (very interesting) suggestion, my intuitive reaction is that a lot of the borrowers are likely to repay based on their credit h
by gregcohn 14y ago
Yes. After a quick look at this (very interesting) suggestion, my intuitive reaction is that a lot of the borrowers are likely to repay based on their credit histories and the desire to protect them.
My #1 question, however, is what makes people turn to a source like this?
- thingylab 14y agoWell, a credit history tells you whether a borrower paid his credit card bill last month, not if he is going to have a job next month. My point is not that people will try to run away with your money, but that holding 100+ notes from Lending Club might not be the diversified investment it appears to be, especially when some macro event happens. Peer to peer lending being somewhat new, I would say some of the borrowers think it's cool. Some of them might also be making a principled choice ("banks are evil"). But ultimately, if you have a reasonnably good credit profile it should be noticeably cheaper than the average traditional lender with its branch network etc.