West Loop Financial LLCConsumer Loan Investing Comes Into Focus – West Loop Financial LLC https://www.westloopfinancial.com Evolutionize Site Wed, 19 Aug 2020 20:50:49 +0000 en-US hourly 1 https://wordpress.org/?v=5.1.22 Consumer Loan Investing Comes Into Focus https://www.westloopfinancial.com/2016/10/10/consumer-loan-investing-comes-focus/ https://www.westloopfinancial.com/2016/10/10/consumer-loan-investing-comes-focus/#respond Mon, 10 Oct 2016 09:00:24 +0000 http://evolvemypractice.com/?p=3155 Online peer-to-peer (P2P) lending is emerging as a provider of credit to individuals as well as small businesses, with the potential to benefit borrowers (by reducing the high cost of bank credit, credit card debt and payday loans) and lenders (by providing opportunities to earn higher yields). A significant hurdle for investors, however, is the...

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]]> Online peer-to-peer (P2P) lending is emerging as a provider of credit to individuals as well as small businesses, with the potential to benefit borrowers (by reducing the high cost of bank credit, credit card debt and payday loans) and lenders (by providing opportunities to earn higher yields).

A significant hurdle for investors, however, is the information asymmetry between the borrower and the lender. The lender does not know the borrower’s credibility as well as the reverse. Such information asymmetry can result in adverse selection.

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