Topic: So is this the point the lending sub implodes? (Read 665 times)

Not necessarily. They could be expecting to receive BTC that is not income in the near future, for example, they recently purchased BTC via coinbase, but wants to make a purchase before coinbase makes the BTC available. A borrower could also simply be taking the risk of having to repay their loan at a higher BTC price, however as mentioned above, this is not a good idea on the part of the borrower
Most people's bills are denominated in terms of USD, not BTC, and BTC is a highly speculative asset with a very volatile price, so everyone may not want to bear the risk that the price of BTC will decline. I have made USD based loans in the past and have been happy with the results....I am also a large swap provider (lender) on bitfinex, and have been happy with the results, especially recently.

The problem with sites like Bitbond, and BTCjam are the high rates of fraud and identity theft, and at least on the part of BTCjam (I am unsure about Bitbond), the very inefficient method of getting judgement against defaulted borrowers -- lenders will need to individually pursue judgment as owners of the Note, as opposed to BTCjam getting judgment as servicer for owners of the Note, and if someone makes $25 or $100 investments in individual notes, this will not be cost efficient.

Anyone who does not have a steady stream of Bitcoin income that tries to take out a Bitcoin loan had the intention of defaulting/scamming from the start.  There's simply no good reason to take loans in Bitcoin unless you're working with Bitcoin - and of course, Bitcoin is extremely appealing to scammers as well.

Services like Bitbond supposedly offering 13% interest per year are extremely stupid considering that the Bitcoin price has basically doubled in the past year.  People who do fiat-denominated loans lose money.

No I do not agree that the lenders should contact their customers at times like this, let the member that took the loan make contact if needed.

As Quickseller mentioned a lot of people that take loans here receive at least a percentage of their income in BTC so the price swings don't effect them as much as someone repaying from a Fiat only income.

I wouldnt say its crashing, but it is unstable currently with the value between $1990 and $2300 USD.

To OP, they shouldnt take out loans if they cant stay committed to pay. They might as well go to a bank or a loan shark for fiat cash and deal with them. Unless otherwise agreed on, if you get a loan in btc, you must pay in btc, and not based on how much it worth. Now a lender *might* work something out if the price does spike, but the only way to find out is to ask. They could agree to a payment plan of some sort, settlement, or something.

The price goes both ways - right now the price is crashing and it's actually benefitial for these people who have took out a bitcoin loan at the ATH because now they can buy the exact same amount of bitcoin for less!

If you didn't know already this is how shorting works, basically someone borrowing a certain currency and selling it straightaway as soon as he gets it because he's speculating on a crash on the market.

You can as well find loans in fiat currencies. It can happen that people sit on some fiat that could be used to earn them a few %.
I actually have a 550€ loan ongoing here.

I think a lot of borrowers have income in terms of BTC, so the BTC/USD exchange rate will not affect their ability to repay their loan. (a common source of income is signature campaigns).

It would be very ill-advised for someone to take out a loan in BTC if their income is not at least somewhat tied to BTC.

Very good and plain...English you know there. Bravo!
So now that we ALL know that you are the smart ass, why you came here in the first place?

Maybe because the REAL life fact is that you CANT get a loan from the "establishment", you ignorant fool.
But you know this, right? You also know that HERE, you won't get a single satoshi or i have to say a single $? Maybe in your "establish" world, you get it better!
Now go out in your rl you dushbag and let us...rob ALL of you!

Welcome to Bitcointalk!And gentlemen,this isn't the right place for you if you're gonna keep comparing bitcoins value in your local currencies.Simple example of that,forum's donator discussions.

I bet you,many people just take loans during the bitcoins peek time. They've no investment,no insecurities,just borrow the money,make marginal profits and give it back.It's a clever business if you ask me.
 

I think that the best case scenario for the borrowers, is to contact the lenders and find a mutual solution.
like paying partial or fix a specific amount if the price skyrocket or dump like hell.

Still though the most lenders just vanish and the lenders always try to find them out...

Most of the lenders have flexible payment times like Lone Shark, it us unfortunate that the price rises so fast for the borrower but a deal is a deal. I do not think any trusted borrowers will default because their accounts are more worth than the loan amount most of the times, and most borrowers have dignity.

What if prices plummet? Doesn't that put the lender at a disadvantage? For example, I lend out 1btc and prices dropped to $10 each from current prices. Nothing I can do about it since I don't have the 1btc but it's with a borrower. Right?

There are two sides of a coin, consider your point on one side and the other for lenders.

Edit: We are dealing with crypto and not it's fiat equivalent here. That's a fact we should really keep in mind.

Feel sorry for anyone who has done a loan not tied to fiat rates.   If this trend keeps up I can't see many people honoring their existing commitments.