It looks like there are a lot of questions here, so I would like to explain what are reputation loans and why we have them.
The history of reputation loans:This is a legacy loan type for what used to be a loan type that people took out, obviously, to buy reputation. Initially, we ran the platform in a very "hands off" manner, and we let people do whatever they wanted (even if it didn't make a whole lot of sense). We saw that a lot of people were taking out reputation loans, so we made a special loan type in order to track such loans. Later, we made those loans a special case, where the borrower could not withdraw the funds, since they were already promising that they won't. And finally, we determined that there is very little value to those loans, so we now we only allow 1 reputation loan per user (ever). The loan is a reputation loan when the type listed is "Reputation", not Business, LocalBitcoins Trading, Other, Debt Consolidation, or anything else. Some people put "Reputation" in the title or the description, but that's misleading and we generally don't allow such loans. We also have a special voting feature for investors, which allows them to vote when there is an improperly labeled loan and we cancel such loans (when we catch them).
Why we still have reputation loans?So as we've seen, the loan type "Reputation" is a bit of a misnomer at this stage. But what is the purpose of that loan anyway? Well, the purpose is quite simple:
There is an added benefit to rep loans, and you'd be surprised, but there are some totally inept people that try to get a loan. They have no clue how Bitcoin works, and while they might not have malicious intentions, they simply fail to figure it out. In some cases they're not inept, but the cultural/language differences are too big to overcome and they fail to adapt to the community. Rep loans allow people to demonstrate that they can do the basic things:
- Make a loan request.
- Obtain Bitcoins from other sources (this is pretty important if they're going to have to pay back a loan).
- Make a payment on the loan.
- Communicate with the lenders.
All of this happens with no risk to the lenders and minimal cost to the borrower. Sure, you can leave rep and what not, but lenders should really think twice about leaving a rating of more than 1 on any number of rep loans. Even if the person does 20 rep loans, there is no reason to give them a rating higher than 1.
You can read more on the discussion in our forum:
http://forum.bitlendingclub.com/index.php?threads/reputation-loans.78/page-2Regarding OP's question:aliraheman' last loan is not actually a reputation loan. As you can see from the listing, the loan type is "Business":
https://bitlendingclub.com/loan/browse/lid/13609/thank-you-make-me-celebrate-500-rep-points-dThis means that the loan can be withdrawn.
He was allowed to use one reputation loan, which he did use in December of 2014:
https://bitlendingclub.com/loan/browse/lid/6341/3-600-apr-early-holiday-season-giveawayConclusion:At this stage the name "reputation" loan does not really describe the loan accurately, it's more of a "Competency" loan. We might change the loan type, but it also involves re-working documentation and other things, so it's unlikely to be modified in the very near future. It's a little confusing, but users generally understand how it works and we don't see a whole lot of questions about it.
I hope that clears up the questions around here.
Best Regards,
Kiril Gantchev
CEO of BitLendingClub
Twitter: @kgantchev
Connect with us:
Twitter: @BitLendingClub
Facebook:
https://www.facebook.com/bitlendingclubGoogle+:
https://plus.google.com/+BitLendingClub
