jasonjm

It's legit 100%.

The problem is will people you loan out pay you back.

Another issue is if you believe these type of loans are moral.

Kind of like the MOB.

Do you really want to put someone in the situation where they have to pay you back at a huge 20% or in some cases more! Wow.

magician

Historically, low-credit debt investments have higher risk-adjusted rates of return than high-quality debt investments. To best protect oneself in this situation, however, one should invest in a large number of statistically uncorrelated debt instruments; e.g., instead of lending $1,000,000 to one deadbeat at a usurous interest rate, lend $10,000 to each of 100 deadbeats at usurous interest rates.

aralls

These rates are FAR lower than payday loan/mob rates, so I don't know what the moral problem is between willing participants.

jasonjm

Some people are desperate, and this plays into being able to take advantage of them.

A good financial advisor would question the need for the money not just how to get it.

I think many of the desperate people looking for loans asap not only probably need the money but need some good advice as well.

aralls

Who's being taken advantage of here? These are willing participants in a market where the price (interest rate) is bid on by unlimited numbers of people.

jasonjm

Not saying that your taking advantage of anyone, but there is no doubt there there exists lenders who do want to take advantage of people.

I at one time was lending money. So i'm not a stranger to this and sites like it.

aralls

I know someone who used an online payday loan type company to borrow $200. She had to pay back $260 after two weeks. If she didn't pay the money back, the loan company just withdraws $60 every two weeks from her bank account, making the annualized rate something like 800%.

cthree

I'm not saying I disagree just that it's not my cup of tea.

As to morality it doesn't enter into it. If you have a social conscience then do some volunteer work. Investing is about making money plain and simple.

To me this type of "system" ranks up there with making money at home in your spare time and network marketing schemes. I'm sure some will make good money at it but the bottom line for me is than being a lender is a business not an investment. I'd rather buy and sell loans than extend credit with the expectation of being paid back with interest.

It's also worth knowing that interest income is taxed at the highest bracket unlike capital gains and dividends which are taxed at much lower rates.

mingster

i'm signing up (to lend)...this sounds fun and i'll just use my las vegas donation fund on this instead...might actually get some money back

QUIKAG

Anyone been doing this for a while? How is the return and risk correlation? I'm thinking about dropping a grand or so at $50/each into different loans just for fun.