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Saving For a Space Ship

Americans are splurging on all flavors of subprime debt

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Americans are splurging on all flavors of subprime debt

https://qz.com/1465107/us-personal-loan-debt-has-risen-to-a-record-driven-by-fintech-lenders/

Quote

..American subprime borrowers are stocking up on all kinds of debt, from home mortgages to automobile loans and credit cards. Personal loans have been especially perky, as financial technology upstarts compete to lend to consumers with spotty credit histories.

The amount of personal loans outstanding rose to $132 billion in September, an 18% increase from a year earlier, according to data from TransUnion, a credit bureau. The subprime segment grew at the fastest rate, expanding 28% from the same period in 2017....

...

Lending has also gotten a boost from the Trump administration, which has relaxed some financial regulations and prevented consumer protections targeting high-interest lenders and payday loans from coming into force.

“The favorable regulatory environment has fueled growth in non-prime lending, with fintechs leading the way,” Jason Laky of TransUnion said in a statement. “Banks and credit unions continue to compete in the personal loan market and are offering larger loans and longer terms to prime and better consumers, whose overall balances are growing the quickest.”..

Fintechs have reinvented personal loans. Their digital platforms can quickly analyze and make a decision on whether to lend money. The lack of collateral means less paperwork, which speeds up the borrowing process.

..While growing debt loads may be a sign of a robust economy, it also raises questions about how these loans will hold up when conditions eventually deteriorate.

Personal loans used to be mainly used by people with poor credit who lacked access to credit cards or home-equity loans. Such debt is unsecured...

 

Edited by Saving For a Space Ship

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"Thelack of collateral means lesspaperwork, which speeds up the borrowing process."

Well I can't see anything dangerous about that

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10 hours ago, Si1 said:

"Thelack of collateral means lesspaperwork, which speeds up the borrowing process."

Well I can't see anything dangerous about that

Hahaha, quite. Now there's a good way of pretending to solve a very real problem, how resourceful - the problems of collateral and paperwork dealt with in a oner, two birds with one stone. Am also struck that it's no longer SUBprime lending (frowny worried face), it's just non-prime lending (expansive hand gesture and shrug of shoulders) - that really should be read out loud by Julia Louis Dreyfuss as Elaine from Seinfeld. People have got so hung-up on that 'sub-' prefix, haven't they? Sillies, getting themselves all worried about nothing, everything will be ok, just sign here.

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16 hours ago, Si1 said:

"Thelack of collateral means lesspaperwork, which speeds up the borrowing process."

Well I can't see anything dangerous about that

No problems for about 3 years, and nobody saw it coming

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  • 150 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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