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This characteristic makes the P2P lending is much appeal to SME and personal borrowers, because they can provide little financial certificate and few mortgage assets.
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A bank must hold the same capital against a loan to General Electric as against a loan to a personal borrower, even though the first is far safer.
Lending Works says that personal loan borrowers are selected by the company's team of "highly experienced underwriters" using advanced underwriting techniques and electronic credit scoring.
Unlike credit card and personal loan debt, borrowers are not provided with regular statements for student loans.
Some officials seem to think that assistance would violate the tenet of personal responsibility that borrowers should not take out loans they cannot afford.
Online lending platforms not only provide borrowers' personal information but also provide social networks for lenders to evaluate a borrower's reputation.
Herzenstein et al. found that the main factors influencing the success rate of loans were borrowers' personal information and credit rating (Herzenstein et al. 2011).
It is offering ultra-cheap funds to banks and building societies, on condition that the money is then lent on to personal and commercial borrowers.
Regulators should further monitor how lenders and brokers use borrowers' personal data and information.
Until recently, there has been no way to gather or interpret the rich trove of data living within the personal networks surrounding borrowers.
Meanwhile, data for unsecured lending shows that a Leeds postcode has the most personal loans per person, with borrowers in LS17 0 owing £1,516 each.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com