Do you lend money to the people who swear to god and promise to pay back? then beware, lending money to them is as good as kissing your money goodbye, says an article in New York Magazine. On the other hand, people who seek your help using the word” debt free, lower interest rate, after tax, minimum payment and graduate,’’ might be more conscious borrowers.
These are the findings of research by three economists- Oded Netzer and Alain Lamaire, of Columbia, and Michal Herzenstein of the University of Delaware. They used data from prosper, a peer-to-peer lending site where potential borrowers write a brief description of why they need a loan and why they are likely to make good on it.
When people talk about ‘promises’and says, ‘’ I promise I will pay back, so help me god’’ is among the least likely to pay back.
The researchers say, people ‘’ mentioning any family member- a husband, wife, son, daughter, mother or father’’ in their appeal. What if they genuinely needs money for a parent’s surgery? That’s the downside of big data. Machine analysis of their appeal will end in rejection because others who invoked family before them proved unreliable borrowers.