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Puddle: Credit Powered By People
Posted: Sat Feb 14, 2015 2:21 pm
by MachineGhost
This sits in-between banks and payday loan sharks. 98% repayment rate in its two year trial. You need a Facebook account to sign up.
https://www.puddle.com/
Re: Puddle: Credit Powered By People
Posted: Sat Feb 14, 2015 3:39 pm
by Mountaineer
MachineGhost wrote:
This sits in-between banks and payday loan sharks. 98% repayment rate in its two year trial. You need a Facebook account to sign up.
https://www.puddle.com/
Interesting ... and sad. Interesting concept for those who need a little help. Sad to think of the people who need a $50 loan to get by, or need to borrow $50 to celebrate Valentine's Day. I can't imagine living so close to the edge that I would need a loan for such small amounts of money that their webpage was showing. Oh my, we are far from the days where most people saved money for a rainy day.
... Mountaineer
Re: Puddle: Credit Powered By People
Posted: Sat Feb 14, 2015 3:51 pm
by Pointedstick
I'm just shaking my head in sadness at the idea of a person being so poor and stupid as to feel the need to borrow a small amount of money to celebrate a made-up consumerist holiday.
The marketing copy used by those hawking short-term loans always depresses me. Like drug pushers, they know that those who use their services are basically unhealthy people who have made terrible decisions but don't want to be reminded of it, leading to this very peculiar and distinctive lexicon devoted to helping people justify digging themselves deeper into the hole.
Re: Puddle: Credit Powered By People
Posted: Sat Feb 14, 2015 10:48 pm
by WiseOne
Interesting newcomer the P2P lending scene - which is what this is. Looks like it's operating under the radar of the SEC & IRS, but I expect that won't last long if this grows.
I took a quick look at the "borrower fees", which amounts to interest paid. It's highest for small loans under $70 (17%!) and then goes down for larger loans. I wonder what the default rate is...doubt it would be any different from that at Lending Club. These are nothing more than unsecured loans with a social-media twist. Yes, the people who borrow are losers spending more than their paychecks, but it's OK as long as the interest rates are high enough to overcome the losses from defaults.
Re: Puddle: Credit Powered By People
Posted: Mon Feb 16, 2015 12:51 pm
by dragoncar
WiseOne wrote:
Interesting newcomer the P2P lending scene - which is what this is. Looks like it's operating under the radar of the SEC & IRS, but I expect that won't last long if this grows.
I took a quick look at the "borrower fees", which amounts to interest paid. It's highest for small loans under $70 (17%!) and then goes down for larger loans. I wonder what the default rate is...doubt it would be any different from that at Lending Club. These are nothing more than unsecured loans with a social-media twist. Yes, the people who borrow are losers spending more than their paychecks, but it's OK as long as the interest rates are high enough to overcome the losses from defaults.
It looks like they lend from a pool build by customers. In general, you can borrow 5x the amount you contribute to the pool. Does that imply that they expect a 20% default rate?
Re: Puddle: Credit Powered By People
Posted: Mon Feb 16, 2015 3:49 pm
by WiseOne
They're hoping that the social-media thing will reduce the default rate by applying "peer pressure", but I doubt that. An unsecured loan is an unsecured loan. The main attraction of this is that it's tax free at the moment, because they're careful to say "fees" rather than "interest". And the way it's presented (everything on the site is about borrowing) makes it look like they're hoping the IRS/SEC won't notice.
Re: Puddle: Credit Powered By People
Posted: Mon Feb 16, 2015 4:08 pm
by stone
In the UK we have an vast scale payday loans company called Wonga. It is sort of intriguing in its financial structure comparing it to banks etc. It is 100% equity financed. Even if ALL the loans defaulted, it wouldn't have any creditors on the hook (unless I guess you view its own staff with wages due as being creditors). Wonga have a 40% write-down rate. So basically the interest charged on the 60% who do manage to pay back has to cover all of that write down plus the overheads. I find the whole set up appalling. They even sponsor a premiership football team and have constant TV adverts.
Re: Puddle: Credit Powered By People
Posted: Mon Feb 23, 2015 2:04 pm
by Libertarian666
This is like the lottery: a tax on people who are bad at math.
It's unfortunate that such schemes have so many participants, but unfortunately most people are bad at math.