Hacker Read

pmontra · 2017-09-04 21:00:01

They've got the money in the account. They can do whatever they want with it, included lending it many times. They don't need fees.

sparky_z | karma 2166 | avg karma 4.14 · | 2018-05-01 00:58:33+00:00

They don't need to write their own loans. They can just open an interest-bearing account with a bank that does and park the money there.

nicoburns | karma 22847 | avg karma 3.29 · | 2022-08-24 12:44:17

They could loan the money interest free. that would make it rather a no-brainer

clarkmoody | karma 4651 | avg karma 4.12 · | 2016-04-25 21:01:57+00:00

Of course people with old money are willing to lend it for a fee.

hgsgm | karma 1743 | avg karma 0.72 · | 2023-08-19 08:38:49

They can convert it to income via loans, tax-free.

zaroth | karma 24347 | avg karma 3.64 · | 2020-03-12 02:01:38+00:00

It’s an interest free loan without the hassle of doing much paperwork.

ikeboy | karma 14321 | avg karma 2.95 · | 2019-05-10 06:16:54+00:00

They have a bank backing the loans anyway, it's not their own cash.

scotty79 | karma 14043 | avg karma 1.62 · | 2023-03-12 03:29:53

You can trust them because if they issue a loan they shouldn't be able to sell it.

richardwhiuk | karma 4385 | avg karma 2.6 · | 2019-08-06 20:32:34+00:00

That's essentially a free loan.

nodesocket | karma 6215 | avg karma 1.78 · | 2018-11-08 23:08:24+00:00

Makes sense. I wonder if they also offered no fees (6,12,24 months) as a form of loan as well if that would be appealing to their customers. At the end of the term, you'd be responsible for paying back all the fees during the term plus interest.

mojuba | karma 4926 | avg karma 3.0 · | 2021-04-25 01:34:47

But that's just the bank lending your money on your behalf (though without you knowing or approving) - I don't see a problem with that.

drcode | karma 11558 | avg karma 4.3 · | 2022-04-18 11:52:49

That's the cool part: everything is part in one transaction, so the lender is paid back instantly with interest.

Zero risk for the lender.

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wavemode | karma 2458 | avg karma 5.07 · | 2023-11-07 22:14:04

It's a good business model. Noone would dare default on such a loan.

HumblyTossed | karma 2989 | avg karma 2.55 · | 2023-06-30 10:24:20

buy, borrow, die

They don't have to use it except as collateral for loans.

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twic | karma 21889 | avg karma 3.14 · | 2017-04-17 22:02:19

And it's more expensive than borrowing from other banks anyway.

imtringued | karma 11098 | avg karma 0.8 · | 2024-02-25 15:42:01

You can bring the money to the bank and lend it out and not pay the fee? Since money is now available for borrowing in a closed circuit you don't have to keep issuing an endless amount of money to keep the Ponzi scheme going.

midnitewarrior | karma 1047 | avg karma 2.88 · | 2024-02-28 22:40:06

I don't think they are a lending company. They do not charge interest, their model lets you pay over time, and you pay a fixed fee to extend the payments. It's all fee based, no interest, so i think there's some regulations they get to sidestep.

jlarocco | karma 7189 | avg karma 2.49 · | 2022-09-03 11:33:58

Exactly. This is a perfect use case for a bank loan.

darawk | karma 12494 | avg karma 3.36 · | 2022-04-21 14:55:14

It's a secured loan. The bank doesn't care if it makes money or not.

RobGR | karma 426 | avg karma 1.31 · | 2009-07-28 02:33:55+00:00

So you don't have to borrow $1000 from a guy who will take $950,000 of the million later.