An absurd policy

[jonanon]

Firstly I have no interest in getting a loan!

I like to scan through the site and have been reading lots of topics of people offering loans demanding 120% collateral, while it is up to the lender to create the terms it just seems to be a risk free way to lend - I am of the understanding that it is the lender who should take the risk, hence why charging interest.

Just my (worthless) opinion.

 

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[Ninietz]

Firstly I have no interest in getting a loan!

I like to scan through the site and have been reading lots of topics of people offering loans demanding 120% collateral, while it is up to the lender to create the terms it just seems to be a risk free way to lend - I am of the understanding that it is the lender who should take the risk, hence why charging interest.

Just my (worthless) opinion.

 

Is it to both parties to find a middle way with which they are both happy and can work with ?

[HarmonLi]

My friend used btcjam and scammed 0.7 BTC.

Wow, so actually he scammed someone for 0.7 BTC or did he get scammed for them? That wouldn't be an honest was to do business then! I don't approve!

[Soros Shorts]

Firstly I have no interest in getting a loan!

I like to scan through the site and have been reading lots of topics of people offering loans demanding 120% collateral, while it is up to the lender to create the terms it just seems to be a risk free way to lend - I am of the understanding that it is the lender who should take the risk, hence why charging interest.

Just my (worthless) opinion.

 

120% collateral does not make sense, unless it is in the form of highly illiquid assets.

[KWH]

Firstly I have no interest in getting a loan!

I like to scan through the site and have been reading lots of topics of people offering loans demanding 120% collateral, while it is up to the lender to create the terms it just seems to be a risk free way to lend - I am of the understanding that it is the lender who should take the risk, hence why charging interest.

Just my (worthless) opinion.

 

120% collateral does not make sense, unless it is in the form of highly illiquid assets.

Often highly volatile coins or other risky items have been offered, hence 120%. OP, no one is forcing you or anyone to get a loan and the lender should NOT take all the risk or there will not be many lenders left. Look through the Scam section at the loan defaults.
You don't want to give 120% of a loan in collateral, (that you get back once loan is repaid), don't ask for a loan from that lender. Simple.

[jdany]

Most of us are not a pawn shop, and really don't want to own your collateral.
If it happens, it's a hassle and 120% collateral probably wouldn't be enough to make me happy about doing it.

Unless by some miracle, the collateral was something I wouldn't mind owning, then, I would take a more conservative 1:1 approach on covering the loan.

[Justin00]

If it makes you feel better, most of the people offering loans and asking for collateral are "collateral scammers" i.e they are not going to loan anything, once you give them collateral so they can give you a loan you will not here back from them again.

Regardless, lenders can ask for anything. But, again, most people asking for loans are scammers. So it is pretty high risk.

I am yet to see any one actually use collateral to get a loan.

[ranochigo]

Firstly I have no interest in getting a loan!

I like to scan through the site and have been reading lots of topics of people offering loans demanding 120% collateral, while it is up to the lender to create the terms it just seems to be a risk free way to lend - I am of the understanding that it is the lender who should take the risk, hence why charging interest.

Just my (worthless) opinion.

 

There are threads which offers no collateral loans. They have a few defaults. The purpose of collateral is to reduce the risk of default. Lenders aren't charging high interest, a few loans isn't going to cover one default. It would be a almost certain chance of defaults. Not much lender actually want your collateral. If you default, they wouldn't want to keep it, hence they ask for 120% collateral so they can sell it if you default. The additional 20% is to reduce the risk of alt coin falling below 100% of the loaned value. There isn't use for a lender to ask for 100% alt coin value of bitcoin when alt coin isn't that stable by logic. If they can't get at least 100% of what you loaned in case you default, why would they want to loan you.

[Yeezus]

I don't understand why most people lend or borrow money on here. To lend it without collateral is nuts and you'll get scammed eventually even if it's just a small amount and why people lend the little amounts they do with high interest is also silly. I think most of the time people just do these deals to build up some feedback and scam later.

[Tomatocage]

Firstly I have no interest in getting a loan!

I like to scan through the site and have been reading lots of topics of people offering loans demanding 120% collateral, while it is up to the lender to create the terms it just seems to be a risk free way to lend - I am of the understanding that it is the lender who should take the risk, hence why charging interest.

Just my (worthless) opinion.

 

If you really scanned this section, you would have noticed a bevy of loan requests offering 20-50% interest, so demanding 120% collateral is well within the norm.

[smooth]

I explained the need for overcollateralization (and for the record 120% isn't that much, when using illiquid and volatile assets as collateral, I would like to see more than 120%) here:

It is useful to consider this transaction from the perspective of a potential scammer, even though you perhaps aren't one, the primary job of the lender in this environment is to frustrate the efforts of scammers, so this thought exercise is useful. If the scammer makes the 100% collateralized loan, and the collateral goes up in value, the scammer pays back the loan and recovers the collateral. If the collateral goes down in value, the scammer disappears, and the lender takes a loss.

This is why overcollaterlization is required by all experienced lenders. The objective probability of the collateral dropping in value below the loan can't be much higher than the interest on the loan, otherwise the terms are scammer bait.

[Killerloop]

Firstly I have no interest in getting a loan!

I like to scan through the site and have been reading lots of topics of people offering loans demanding 120% collateral, while it is up to the lender to create the terms it just seems to be a risk free way to lend - I am of the understanding that it is the lender who should take the risk, hence why charging interest.

Just my (worthless) opinion.

 

Plain wrong.
0% risk for the lender is mandatory, otherwise it is called gambling and appropriate interests should be applied.

[tertius993]

If it makes you feel better, most of the people offering loans and asking for collateral are "collateral scammers" i.e they are not going to loan anything, once you give them collateral so they can give you a loan you will not here back from them again.

Regardless, lenders can ask for anything. But, again, most people asking for loans are scammers. So it is pretty high risk.

I am yet to see any one actually use collateral to get a loan.

I gave a loan against LTC collateral a little while ago, so it does happen.

Was a very small loan though.

[smooth]

If it makes you feel better, most of the people offering loans and asking for collateral are "collateral scammers" i.e they are not going to loan anything, once you give them collateral so they can give you a loan you will not here back from them again.

Yes there are scammers on both sides. However, the nature of lending is such that the lenders (people with a lot of excess capital/liquidity) tend to be consistently active for a long term period of time, so their reputations mean a lot more.

If you stick to the experienced lenders this will not be a problem.

Furthermore, on larger deals or if there is a question of lender trustworthiness the collateral can be held by a third party.

[Quickseller]

The price of most alt coins is not stable in any regard. The additional amount above the amount of the loan is to protect the lender from price declines of the altcoin.

[Justin00]

Yeah but who is actually lending anymore ? Except for newbies kind enough to ask for collateral first... cough cough.
Their isnt one or 2, probably one legit lender... This isn't 2012 anymore.. Its just scammer-vile from both sides.
Lending forum is a joke and should be shutdown.

If it makes you feel better, most of the people offering loans and asking for collateral are "collateral scammers" i.e they are not going to loan anything, once you give them collateral so they can give you a loan you will not here back from them again.

Yes there are scammers on both sides. However, the nature of lending is such that the lenders (people with a lot of excess capital/liquidity) tend to be consistently active for a long term period of time, so their reputations mean a lot more.

If you stick to the experienced lenders this will not be a problem.

Furthermore, on larger deals or if there is a question of lender trustworthiness the collateral can be held by a third party.

[Vod]

Yeah but who is actually lending anymore ? Except for newbies kind enough to ask for collateral first... cough cough.
Their isnt one or 2, probably one legit lender... This isn't 2012 anymore.. Its just scammer-vile from both sides.
Lending forum is a joke and should be shutdown.

If it makes you feel better, most of the people offering loans and asking for collateral are "collateral scammers" i.e they are not going to loan anything, once you give them collateral so they can give you a loan you will not here back from them again.

Yes there are scammers on both sides. However, the nature of lending is such that the lenders (people with a lot of excess capital/liquidity) tend to be consistently active for a long term period of time, so their reputations mean a lot more.

If you stick to the experienced lenders this will not be a problem.

Furthermore, on larger deals or if there is a question of lender trustworthiness the collateral can be held by a third party.

I still lend from time to time, but only if I have sufficient collateral.  Those are getting very rare.

It's more profitable to just sit on my coins and wait for the price to rise than to lend it out.

[smooth]

I made several loans last year and earlier this year. I have also worked on other loan proposals, including some bigger ones, that didn't happen for various reasons but those reasons did not include the need for appropriate overcollateralization.

The fact is that legitimate uses for lending in a online nearly-trustless environment are very limited, but they do exist. Scams and attempted scams outnumber the legitimate loans, that is for sure.

Yeah but who is actually lending anymore ? Except for newbies kind enough to ask for collateral first... cough cough.
Their isnt one or 2, probably one legit lender... This isn't 2012 anymore.. Its just scammer-vile from both sides.
Lending forum is a joke and should be shutdown.

If it makes you feel better, most of the people offering loans and asking for collateral are "collateral scammers" i.e they are not going to loan anything, once you give them collateral so they can give you a loan you will not here back from them again.

Yes there are scammers on both sides. However, the nature of lending is such that the lenders (people with a lot of excess capital/liquidity) tend to be consistently active for a long term period of time, so their reputations mean a lot more.

If you stick to the experienced lenders this will not be a problem.

Furthermore, on larger deals or if there is a question of lender trustworthiness the collateral can be held by a third party.

[theonewhowaskazu]

Firstly I have no interest in getting a loan!

I like to scan through the site and have been reading lots of topics of people offering loans demanding 120% collateral, while it is up to the lender to create the terms it just seems to be a risk free way to lend - I am of the understanding that it is the lender who should take the risk, hence why charging interest.

Just my (worthless) opinion.

 

Even if it is a risk free loan (which it isn't), interest is still charged as the lender has to give up the opportunity cost of BTC. Moreover if you don't like the terms of the loan don't accept it.

[LostDutchman]

Firstly I have no interest in getting a loan!

I like to scan through the site and have been reading lots of topics of people offering loans demanding 120% collateral, while it is up to the lender to create the terms it just seems to be a risk free way to lend - I am of the understanding that it is the lender who should take the risk, hence why charging interest.

Just my (worthless) opinion.

 

Yep.

You're right.

Worthless.