Topic: What do you think of reputation loans? - Is it the safest investment? (Read 1736 times)

No, its not the safest investment.
He only build some trust, and when he have enough he lend 100 BTC and you see him maybe never again.

You will lose all your gains from the other loans and maybe all your bitcoins.
Never trust someone who you dont know.

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-2

Regarding 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-d
This 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-giveaway

Conclusion:
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/bitlendingclub
Google+: https://plus.google.com/+BitLendingClub

I don't see how it is legitmate. If it is a loan used for reputation purposes and it can't be withdrawn, isn't it literally like paying investors for trust? It doesn't show that the specific person is trusted with that amount of money. The borrower can run away with the money if the loan can be withdrawn but if it can't, there no point spamming. Note that I'm talking about reputation loans as a whole.

I think that's precisely I'll be investing as soon as he comes up with the loan. Let's see how it  goes

I suppose if the reputation loans cannot be withdrawn, then it is definitely a safe investment, and there's nothing wrong with investing in it.

It is basically giveaway to his loyal investors and only in bitlendingclub on his birthday and he gets reputation points for it, so it is a win-win, so for example if you deposit 100 btc in his reputation loan, you withdraw 102 btc in few minutes and you got a good safe return in few minutes and he gets better credit rating and more people support.  He has been taking loans for trading purposes and paying back with interest every time, now the investors have shown great faith in him and have always funded his loans extremely fast and at low rates. So, as a Thank you to his investors, he is basically giving away a few btcs to maintain this relationship with the investors. And such a huge Reputation loan has never been done on Bitlending, so it will be a great marketing strategy for him.

help me understand something.
if he can not withdraw a reputation loan, then what is the point of getting that loan?
does this mean you take the loan and it just sits there in your account, you can not withdraw and do anything with it but you have to pay back the loan with interest?
what is the point in that?

I think it is just fine, not everyone can take 100 btc reputation loan it is because of credit rating and he has credit rating to receive loans upto 220 btc, all his previous loans were funded in 10 minutes, and he is doing a giveaway on his birthday for his loyal investors

He is just 18 years old and very ambitious guy and also a serial entrepreneur, however this reputation loan is just a giveaway for his birthday and these reputation loans cannot be withdrawn. I hope it does well for him 

I am rather interested to see where this young man goes and if he succeeds. It is fun to see young people work hard and make it. My best regards to him.

Even he is building up his reputation. I takes a lot of times and efforts, but once he defaults once then he completely ruins his repuation. He is unable to take another loan any more. It is like our credit record on which everything is based like issuing mortage, loan etc. I think it is worth a try.

Yes, the reputation loans cannot be withdrawn , you can read here https://bitlendingclub.com/content/help, he usually takes 5 to 10 btc loans and the loans fill-up in 10 minutes and has paid back early on time.

                        

Maybe you should also check out the list of IP addresses used to access his account https://bitlendingclub.com/user/ips/id/5333/aliraheman

From the looks of it his account was accesses from a number of IP address ranges from a number of countries, none of which are known IP addresses of proxies according to bitlendingclub