/r/borrow or should I become a loan shark

[suntan]

So I find myself in the position of currently being cash rich.

I was thinking of lending money on /r/borrow (probably after the holiday season). Anybody do this here and what were their experiences like?

[Xtrema]

Collateral?

https://www.theguardian.com/world/2016/jun/15/chinas-naked-loans-force-female-students-to-bare-all-in-return-for-more-cash

What's the angle here? Is it because it's not regulated?

:rofl:

[A790]

Originally posted by suntan
So I find myself in the position of currently being cash rich.

I was thinking of lending money on /r/borrow (probably after the holiday season). Anybody do this here and what were their experiences like?
How much money are you looking to loan and at what interest rates? I have some (legit) connections that may help you.

[suntan]

Not looking for long term commitments.

[Buster]

I haven't run the numbers on /borrow to see how it looks, in aggregate, on a 30% default rate, and various interest rates (10-20%).

[suntan]

https://redditloans.com/

[Buster]

The problem with this is how to deploy your capital efficiently. It's too much time to do $500 and $1000 loans at a time. It's difficult to scale.

[blitz]

I would suggest opening a craft brewery instead.

[Disoblige]

Wow. Lending money to reddit users, what could possibly go wrong...

[suntan]

Better than lending to beyond users? :burnout:

[Disoblige]

Originally posted by suntan
Better than lending to beyond users? :burnout:
OUCH. You got me there :rofl:
Good one.

[Xtrema]

So what stops people creating new accounts, build up karma, do a few low amount loans and then a big one and skip town?

[Buster]

Originally posted by Xtrema
So what stops people creating new accounts, build up karma, do a few low amount loans and then a big one and skip town?

Lending money works much better when you can scale.

It's actually less risky to do ten $1000 loans than it is to do one $1000 loan.

[suntan]

I can use a spreadsheet to keep track of... ten loans.

I can even build a database app!

[mr2mike]

Originally posted by blitz
I would suggest opening a craft brewery instead.
I lol'd

[Buster]

Originally posted by suntan
I can use a spreadsheet to keep track of... ten loans.

I can even build a database app!

I'm just wondering if the risk-adjusted ROE is worth your time?

[Xtrema]

Originally posted by suntan
I can use a spreadsheet to keep track of... ten loans.

I can even build a database app!

Looks like bot on that site is doing very good job already.

[ercchry]

OPEC is cutting production.... just put it all into leveraged oil plays! THE RECESSION IS OVER!!!! :rofl:

[ExtraSlow]

Originally posted by ercchry
OPEC is cutting production.... just put it all into leveraged oil plays! THE RECESSION IS OVER!!!! :rofl:
https://media.giphy.com/media/ZPFQVis9WAAcE/giphy.gif

[TYMSMNY]

I could use a loan. Pm me some details and how much capital is available.

[suntan]

The loan amounts asked on that subreddit are the amounts I wish to lend out.

[TomcoPDR]

Originally posted by TYMSMNY
I could use a loan. Pm me some details and how much capital is available.

If you have enough equity in your house, you'd probably get better rates getting line of credit against it instead for short term $$$ flow use.

[ercchry]

Originally posted by TomcoPDR


If you have enough equity in your house, you'd probably get better rates getting line of credit against it instead for short term $$$ flow use.

Can't get out of repayment with loopholes that way though :rofl:

I have an LLC.... can I haz loan please? :D

[roopi]

Take a look at Lending Loop if you are interested in giving out smaller loans. Terms would be longer as you are lending to businesses but might be safer.

[max_boost]

Originally posted by Disoblige
Wow. Lending money to reddit users, what could possibly go wrong... How about lending period lol Glad my friends don't ask because I'll them to just go to the bank. You kinda lose friends that way but with billions of people out there you just make new ones lol :rofl:

[A790]

I've given loans to friends and its turned out okay. However, I take collateral and I take something they'll want back...

[J-hop]

A couple things:

You'll have to be careful as your effective interest charges, penalties etc can not exceed 60% of the original loan in a year (see garland vs consumers gas co). Sounds like it would be hard to go over? Do the math compounding monthly or weekly and you'll see you will barely be able to charge any interest.

Related to that you will need to have a decently large sum to start with to make any money. Under 100k? Don't even bother, unless you don't care about staying legit.

Now this comment will probably be trashed by people but from those I know that have used loan sharks they aren't exactly the most reliable, sound investments. That is why they are going to a loan shark instead of the bank. So you're going to need a certain amount of "muscle" to collect, or it's going to be a living nightmare for you.