Lending-Based Crowdfunding Is A Nascent Fintech Market

The operator of this website, LendYou.com is not a lender but a loan broker with a large network of authorized lenders. LendYou.com is an advertising referral service to qualified participating lenders that are able to provide payday loan amounts between $100 and $1,000 in cash advance loans and up to $5000 for installment loans. Not all creditors can provide these amounts and there is no guarantee that you’ll be accepted by an independent participating lender. The service does not constitute an offer or in any way a solicitation for payday loan products that are prohibited by any state law. LendYou.com do not endorse or charge for any service or product. Any payment received is paid by participating creditors and only for advertising services

Asymmetric information in lending is a huge risk. When there is misinformation from a lender to a borrower, this can cause a few different problems to arise; for example misinformation about job security or credit history from a borrower to a lender can result in late or missed payments, fraudulent spending of the money lent or the lending amount to be turned as bad debt. Specialization is a tool used for risk management. Specialization in lending helps reduce risk by gathering valuable and accurate information about the borrower. It

So it is also attractive for Jules Kroll to take this opportunity to enter the credit rating industry. In addition, the “issuer pays” model, which used by the big three rating agencies, lets companies shop around for the best ratings, putting pressure on the agencies to inflate their grades. As a result, it is very difficult to argue that they can adequately represent the users’ side. Therefore, Jules Kroll wants to use another model that can assign unbiased and reliable ratings.

people's need for extra funding has led to the extension of credit to large segments of the population who were previously deemed unqualified. However, some lenders have tried

* Not only do borrowing and lending rates differ due to taxes and transaction costs, but some individuals are screened out of legitimate credit markets altogether due to informational asymmetries

The financial crisis of 2007 and 2009 was the worst since the great depression. It was not a single event but a series of crises whose seeds had been planted in yet another recession of 2001 and the era of the internet bubble years earlier (Bodie, Kane, & Marcus, 2011). One of the reasons for the crisis was the rise in subprime lending. Subprime loans were offered to individuals who did not qualify for prime rate loans and carried a higher rate of interest than prime loans (Gilbert, 2011). Another reason behind the subprime mortgage crisis is argued to have been due to the lack of ethics and poor policies such as the Goldman rule which encouraged pursuit of profitable opportunities irrespective of the effects on others (Watkins, 2011). In this paper, I will briefly define financial markets, outline types of financial markets and orders and trading mechanisms in

Amujo, O. C., & Otubanjo, O. (2010). The informal corporate identity communication process. Corporate Reputation Review, 13(3), 157-171. doi:10.1057/crr.2010.18

Small loans and their relatively high interest rates have recently come under attack by Alabama legislators according to a report posted at Jdsupra.com.

When consumers take out home loans, it is important for consumers to understand whether they can or cannot take out an amount for their home loans in order to reduce the risk of them defaulting on their loans. Consumers can ask financial professionals for advice and come up with a financial planning process to stay on track of their goals. However, sometimes these professionals will not give advice in the consumer’s best interest. One such example of where it can happen is NAB’s ‘Introducer Program’, in which professionals who are able to refer a customer to a bank to make a home loan will earn a commission (NAB’s Introducer Program

As the U.S. economy continues its struggle to climb out of a deep recession, personal loans remain very difficult to secure. Having shouldered much of the blame for the financial hardships that have befallen consumers across the nation, many banks now require potential borrowers to meet strict criteria for an approval. With the financial institutions being more selective about who they assist, Detroit locals like Ashley Wright are learning that consumers with excellent credit and decent paying jobs are the most likely to make the cut. "Getting an approval was definitely a journey," said Wright, who was in search of a personal loan to help out with school and living expenses. Wright found that a private bank was the best place to turn for

(Name) …. let me cut right to the chase and tell you the million dollar credit secret that

Over the years, both lenders and borrowers have endeavoured towards the possibilities of fundamentally disrupting and disintermediating existential financial links, distancing themselves from the financial main, and building new financial operators.

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).

Crowdfunding creates funds for new projects by using internet and social media. This can benefit small business projects to obtain their required funds. A project receives small investments from wide range of individuals through web advertising and social media. The individuals (investors) who have invested in the project may receive incentives such as discounts on the products, early opportunity to purchase their products, inclusion of their name in the list of contributing founders etc., so, they are not purchasing the share of the company. Crowdfunding avoids going to the banks, friends and family to get funds. It also avoids giving up partial ownership of their company. The websites like www.rockethub.com, www.peerfunding.com,

In early 2011 unemployment was rising, economic growth was stagnating, and families were panicking about making ends meet,all while legal loan sharks were circling the poor. With consumer credit becoming less available, and banks more rigorous in lending to consumers, there has been an increase of payday loans and short-term lenders representing sub-prime lending bussinesses. These institutions specialize in offering fast cash and fast loans, both of which are strongly advertised via different media platforms such as a website, television, andradio stations(Aldohni, 2013). Desperate consumers seeking these short-term financial solutions often end up with long-term financial disasters. The promise of easy credit without a credit history does not come cheap;sometimes costing consumers an Annual Percentage Rate (APR) of as much as 4000 percent. Calculating the terms of loans using a risk-based pricing system, subprime lenders are able to generate varying interest rates of which they offer to borrowers with varying credit histories.(Investopedia).