r/borrow
old.reddit.com
old.reddit.com
I always insisted that I was only paid back what I had lent. I stopped doing this when I was not paid back several times in a row.
As a frequent reader what I noticed was that people were repeatedly coming back. They might ask for £250, they repay with whatever 'interest' was asked, and then they post again asking more money. As the user's payment history is posted, and they seem trustworthy, they get the new loan. Repeat and repeat.
They are forever trapped in a cycle of paying more back and from what they ask - it's never for what might be called luxuries - they slowly sink.
So while I saw it as useful, and indeed it may be for some, there are others who are effectively being financially abused and they have no way out of that loop.
What’s the deal here? Are most borrowers scams? Is there no better option for the financially vulnerable? I’ll try to convince my wife it’s worth an experiment.
It seems like the bot would have to make a new account once the previous one is burned/flagged
These are gifts to some people, not loans. Loans are enforceable contracts.
Also, I think you'd make a loss, with 50+ percent of loans not paid back.
A 70% default rate would mean that you expect lose 68% of your money every month.
Sure, you don't go to 0. But you need a very high repayment rate for short term loans to work; and very difficult to interest your way out of the problem.
It seems the enforcement mechanism here is just reddit accounts. Accounts have to be a few months old with minimum karma. Fail to pay back a loan and your account gets banned and you have to start a new one. Not a huge barrier but not a tiny one either.