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This sounds interesting. I have a few questions about borrowers. Does LC somehow make sure that the money that they lend is going to what the borrow says it is going for? If someone is buying a car for example, do they cut a check to the dealer? Do they make any attempt to secure assets being purchased with loaned money? Are you able to get updated information on borrowers that you are funding? If they say they are borrowing money to pay off a credit card, you should see the credit card balance go down. Similarly, can you see if someone runs up a bunch more debt? I've just seen way too many people get home equity loans to pay off credit cards and then go on shopping sprees since their card balance was 0.
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Dec 3, 2012 21:51
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kansas posted:Am I missing something? This seems like a huge amount of work to do for such a small return... You could scale it up, but the risk is high so I'm not sure that would be a wise idea. Correct me if I am wrong, but the days of getting ~5% returns without any work are pretty much over. For comparison,Bankrate is telling me that 3 year CD rates are about 1.3%.
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Dec 10, 2012 15:27
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Uranium 235 posted:Well you can always just throw money in a stock market index fund. That takes almost no work. There's no way of knowing what return you'll get, but 5% isn't out of the question. Yeah, I probably should have added "and without decent risk". LC looks like it takes work, but by doing so you can get returns and minimize risk.
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Dec 10, 2012 18:52
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