Other providers that offer managed investing in Peer-to-Peer Lending talk about their statistical models, but gloss over an advantage of Peer-to-Peer Lending that they’re not taking advantage of: rich, written descriptions of how the borrower will use the money. If it’s laden with typos and grammatical errors, what does that say about the underlying worthiness of the borrow? To me, it says stay away.
Let’s look at a couple examples:
This potential borrow’s loan title is “peace of mine.” This sends up a red flag to me right off the bat. Either:
- This borrower does not know basic grammar
- This borrower needs the loan so badly s/he rushed through the application and didn’t check for basic spelling grammar
- This borrower made a careless mistake
Even if it was a careless mistake, this borrower is less trustworthy than a borrow with a similar profile but uses correct grammar. This borrow could have problems finding a new job should s/he be laid off, and could make other careless mistakes to put their job in jeopardy. Not the type of person Peer Lending Advisors invests in.
The automated lending models that use a computer algorithm to select loans wouldn’t pick up this issue. However, a manual review of every loan did, and made the decision to not invest.
Here’s another example:
This is an extreme example, but not unusual. This borrower works at the “Radisom” hotel and the loan description is not a legitimate sentence. It’s likely that this borrow’s first language is not English. To use such poor language in their loan application, and to even spell the employer’s name incorrectly does not inspire confidence. Do you want to loan your money to this person?
Peer Lending Advisors sifts out the chaff like this loan and only invests in loans that meet computer model criteria PLUS a human underwriting review. Don’t get stuck with loans like these in an automated investing platform.