Looking to start offering loans but need advice

[solidshotnosh]

I am looking to start loaning out bitcoin to make some extra money on the side, I have kinda a general direction on how to go about it but I am looking for advice from some pro lenders on what to look out for and who to accept and what kind of terms to use. Any advice is greatly appreciated I will be sending bitcoins to the people that give me advice that I can actually use. Thanks!


On a side note beyond personal loans, I am also interested in investing in currently active websites for weekly/monthly dividends. I also maybe interested in investing in new business startups. I run a 7 year old marketing company, not only could I bring an investment to the table I can also do the marketing. PM me with your offers, thanks!

[--Encrypted--]

I don't lend that much to be considered a "pro lender" but I think I can give you some advice.

1. read the stickies for some useful info.

2. never ever give a loan without collateral that is worth at least 120% of the loan amount if you want to be safe.

3. do a little digging on the borrower before sending anything to them. they may have another active loan somewhere (check the ledger for loans and the trust page for password reset. but try not to rely too much on the ledger because sometimes it's outdated.). this is very important if you choose to ignore the collateral rule.

4. if you're going to accept bitcointalk account as collateral (not recommended), always ask the borrower to sign a message from an old address they posted here on bitcointalk. make sure you check that post to see if they have edited it recently. if they can't sign a message, don't give them a loan. same thing if signed a message using a new address.

[The Sceptical Chymist]

Dear god, only do collateralized loans.  You'll most likely get burned otherwise even from people who've been trusted.  It's crazy.  And another thing I see a lot around the lending section is that people pay back loans late more often than not.  Good luck.  Quickseller might be able to give you good advice but don't listen to him about escrow.

[Patatas]

For now,you can invest in Peer to Peer lending website www.getline.in You get daily interests based on your investments.

As long as lending is concerned.I tell you,very few trusted members who pay loans in time with good interest rates so as to many money.Most of time its the majority of shill accounts who do stuff that they're sure will get them negative feedback.They ask for loans,give their accounts as collateral for fairly small amounts and run away.After few days you will find the account given negative marks and is not worth the sell.Your loan=Default.

You can start digging deep and understand if the loan requested is by a legit person.Few rules I would like to recommend.

1)Always ask for a signed message from the oldest staked address,you can have a clue when was this account sold.
2)Always check in the trust profile page if the user's password was set or changed recently.
3)Check for Lutpin's thread about the alternative accounts and see if the person has a shady history or any of them are currently negative marked.
4)Use escrow to hold and verify the collateral.
5)Check the validity or say history of the alt coins you're taking as collateral.
6)Never give loans in $ ,always use bitcoin prices to do so.Dollar rates fall when bitcoin pumps and hence the borrower will be in profit of btc's.
7)Don't ever accept digital goods such as Gift Cards/Domains/Hosting etc for collateral.They either can't be transferred or are volatile to chargebacks.
8)Finally,keep in mind,the profits earned by interest rates depend on how many people borrow and use your service.The more people use it,more chances of your profits.Build good relationships  with the borrowers so they can ask loan again.

Good Luck!

[DarkStar_]

I've had loaned people 14 times in the 2 months that I have been lending, so I think I qualify as a "pro lender".

1. Read the stickies, and get yourself familiar with those threads.
2. I'm going against what the people so far have told you, don't only take loans with a collateral. From my 2 months in the lending business, most people with good collateral tend to go to the more trusted lenders (zarzab), so not many people will come your way.
3. Research! Before lending, look at their profile, trust, posts. Use google and search (USERNAME) loan onsite:bitcointalk.org.
This way, you can see if they made any public loan requests. Never lend to someone if they have an active loan already.
4. Always ask for a signed message. Even if they are not giving their account as collateral, if their account was hacked, chances are they won't repay.
Use the seclog too to check for password changes.
5. Check the Known alts of anyone: User generated thread and take a look at their alt accounts (If they have any). Recently, an alt account of someone else who had an active loan came to me for a loan. Duplicate loans are not good.
6. Don't take accounts that aren't bitcointalk accounts, or gift cards or anything you can recover by claiming it's hacked.
7. Taking altcoins? Research the alt coin someone offers you. If there is a small order book, or if the priced dropped a lot, or if it's a scam coin, it's not good.
8. Trust your gut feeling! If a loan seems suspicious, don't provide the loan.
9. Accept escrow to hold the collateral.
10. Always take collateral before sending the loan funds.
11. Decide on what profit you want. Want more BTC? Take loans in BTC amounts. Want more $? Take loans in dollar values.
Make sure to have a term where the repayment amount must be higher than the loan BTC amount if you are giving loans in dollar amounts so you won't be in the negatives loan-wise.

Try visiting other lender's threads and see which kinds of loans they accept/decline and their TOS.
Make sure to have a policy on late fees.


All I could think of, will update if I think of anything else.

[Glucose]

A few but useful advices :

1 : Get a collateral. Otherwise, soon or later, you will lose big. And your loss will probably cover your profits (you will need 10 successful loans to cover 1 unsuccessful)

2 : Before lending : Check the last posts of the user :

a) If he posted several loan demands it's strange
b) If he tried to sell his accounts it's not a good sign either
c) Tries to guess why he is asking for a loan : if he spend a lot of time in the gambling section, he is probably asking for gambling. Just be aware of it.

3 : Before lending : Check if the password of the borrower changed recently. If it did, ask for a signed message.

4 : Don't loan to red flags users ; Don't loan to newbie

5. For big amounts, it can be wise to do a $ loan. With bitcoin volatility you never know what can happen...

[solidshotnosh]

Thanks for all the advice! You guys absolutely rock, I am going to close this thread but everyone that replied if you can please PM me your bitcoin address I've received more information than I thought i'd receive. Thanks again everyone!