P2p Lending Case Summary

As a loan company, the main intention would be to profit, as their targets are people with expenses they cannot afford. Falling behind on your payments is as easy as digging a hole, one that takes a long time to get out of.

After the investment bank get those mortgage, they stick them together, and this is called Mortgage Backed Security. They put those Mortgage backed security in to open market,and sell them

-Secured Lending ($5000) plus 3% interest, pay monthly for 2 years with $35 late fee.

Typically you will find predatory lenders in low socioeconomic neighborhoods targeting the poor, minorities, and elderly. This is because people who live in these neighborhoods are most likely not going to be able to get help from banks, because they either do not make enough money, they have bad credit, or other factors. So during a time of crisis people will resort to these types of lenders because they feel like they have no choice. Often times they are not educated on the way the loans work so they do not realize what they are getting themselves into.

As technology improves, the wide use of “hard information”, such as the borrower’s credit history, reduces informational asymmetries. Therefore, long-distance small business lending is easier (Frame, Srinivasan, \& Woosley, 2001; Petersen \& Rajan, 2002). However, even with the use of credit score data, collecting ``soft information" still helps local lenders control risks to avoid delinquency (DeYoung, Glennon, \& Nigro, 2008) and provides informational advances in offering more favorable rates (Agarwal \& Hauswald, 2010).

Intensity of Rivalry among Existing Competitors: Although the largest company of a new field in the United States, LC faces a constellation of upstarts. Some of these are direct competitors, like Prosper, which deal with consumer debt like LC. Others are more specialized, like GROUNDFLOOR, which facilitates P2P real-estate loans, or SoFi, which creates P2P loans focusing on refinancing student debt. And of course, traditional banks could more aggressively compete in the consumer debt field, as Goldman Sachs is doing with its online lender Mosaic, or Wells Fargo with its FastFlexSM small business loans. Because LC grew in part by capitalizing on traditional banking’s withdrawal from small business and consumer debt servicing, a sustained reentry could pressure LC’s margins greatly.

Borrowers can experience unique advantages through peer to peer lending compared to other types of financial loan methods. For example, If a potential borrower bears a shaky financial history but a sympathetic story as to why they think they should qualify for a loan, a lender can still grant a loan and choose to undergo a higher rate of return, assuming there is greater risk to fund this loan (Schneider 2008). Financial institutions such as banks or credit unions that would normally turn away these people, borrowers have an increased opportunity with peer to peer lending (Schneider 2008). Additionally, a borrower gets a more favorable interest rate on their loan than one would otherwise have gotten from funding elsewhere say through a bank or a credit card company because they have a pool of potential lenders to choose from (Investopedia 2017).

Online peer to peer lending is defined as the “transaction using the internet in which one or more individuals lend money to one or more other individuals”. The keystone of P2P is that individuals, rather than institutions, stand on both sides of the transaction. It has been said by the P2P sites that by eliminating the middle man i.e. the commercial bank in traditional loans- investors can earn high returns and the borrowers can obtain financing at lower rates.

Another major characteristic of microfinance is that they have numerous loans to informally-organised businesses which are often in small amounts over a short-term period with turnover of the aggregate loan portfolio maturing several times during the year. These are unsecure loans with simple repayment structure and documentation, but interest rates are generally higher than those in the formal sector (Anderson, 2002).

In a mortgage, the borrowers have more beneficial rights rather than the lenders since mortgages are not made for lenders to gain properties. In this essay, will extensively analyse borrowers and lenders rights through a scenario. Firstly, it will be defined what is a mortgage and how it operates. Then, it will investigate that Rees has an inviolable right of redemption and any collateral advantage should stop. Secondly, it will recognise that Rees can postpone his right of redemption. Conversely, once Rees defaulted, Grantwill Bank can bring an action to the court. Moreover, the bank’s right of possession can be adjourned or suspended in a reasonable period, if Rees brings an evidence of a financial plan. Finally, Bank may sell the

Advancements in technology coupled with new legislation have brought upon a game changer in the financial industry known as peer-to-peer to lending. Originally established as a way to help boost the economy in developing countries, peer-to-peer lending is expanding its capabilities into first world countries through online platforms. This new industry is experiencing tremendous growth, with pwc estimating that it could be a $150 billion business by 2025 (Karabell). The Lending Club and Prosper are two of the biggest online platforms that currently offer peer-to-peer loans. Inspired by the 2008 financial crisis, both the Lending Club and Prosper saw the Todd Dockley Act of 2010 as an

BLOCKCHAIN-BACKED LOANS™ Blockchain-Backed LoansTM Abstract 08/09/2017 Abstract SALT is a membership based lending and borrowing network that allows users to leverage their blockchain assets to secure cash loans. Our Secured Automated Lending Technology is a protocol and asset agnostic architecture designed to adapt to the constantly growing class of blockchain assets.

There are no strict regulations in borrowing online and this is one of the major reasons that most of the potential borrowers are fond of the same. The trend of online loans has come into being in order to resolve financial troubles with great ease and convenience. Nowadays, personal online loans are getting treated as payday loans and these loans are the most popular forms of loans that have emerged as the best means to get greater financial relief.

Predatory lenders prey on consumers that are in a position so desperate that bargaining for a better deal becomes impossible. Lenders tend to set up in low income areas where education is low and desperation runs high. They can then use their position to impose astronomical origination fees and interest rates on the consumer. State and Federal governments have created laws to limit these practices; which focus on fees, interest and the method by which the loans were formed. Even though consumers are protected in the subprime loan market, the loans are still giving the lender more advantages than a prime market loan. The following will be focusing on the most notorious of predatory loans, the payday loan. First payday loans will be defined,

In addition, loans can be divided into two categories： unsecured and secured loans. In general, unsecured loans include credit cards, which are more expensive than secured loans, but it is not risky if circumstances change. For instance, If a client fail to repay an unsecured loan, the lender 's only option is to meet the lawyers, but it may not result in payment. The interest rates for unsecured loans are usually higher. But as for a secured loan, it is secured over property .In some circumstances, if a customer fail to repay, the lender can recover the amount owed by forcing the sale of the secured property. Interest rates tend to be a bit lower. Banks issues loans to both people and companies. It can help people buy a home or start a business or for companies to make investments, for example, loans help corporations with