What is peer-to-peer lending?

What is peer-to-peer lending?

Information 08.09.2017   0 Comments   594  Add to Reading List

It’s when an investor makes a small loan to a small borrower via a fintech marketplace startup.

The startup almost never has skin in the game so their incentives are misaligned with lenders.

The startups generally touts their great algorithms and data science that helps them lend using credit risk analysis that they allege is better than FICO.

I’m not sure these startups are great long-term for lenders because the business model is to hose borrowers if necessary to churn more volume. As long as the lenders are paid back, some will keep lending money. When the market implodes, those lenders lose money but you’re not liable. And you can find new investors to make money off of.

These kinds of startups require a lot of capital to underwrite loans they can’t syndicate out or pass on to others to take down.


Visit HireCA.com Now

Get All your Work Done By Expert visit Hireca.com Or Whats app your Query At : 9873139513 or mail at hi@hireca.com