Topic: What is the point of collateral? - page 2. (Read 1531 times)
Collateral works better in the real world for things like title loans and such, and it's what pawn shops are based on. You give your wedding ring as collateral for a $100 loan and if you default, the pawn shop has way more than $100 to sell. Here online it's not so useful, as most collateral has to be digital. And then there's the issue of borrowers overvaluing what they've got.
Most of loan requests are a short term period. Would you sell you iPad if you know you are in need of money only for 1-2 days ?
You don't make any sense.
I could sell the iPad and make the money back in the same time, it would take me to pay back the loan.
So if I needed the loan for 1-2 days I would sell the iPad and make the money back in 20 days. 20 days is the same amount of time it would take for me to pay back the loan and get my iPad back.
As for security, I would say it's a ripoff.
The whole idea of 110-125% collateral does not make sense.
It's stupid no matter which way you argue it.
I think you are wrong with this. IRL pawnshop gives money but needs a collateral in case of default, that makes sense.
If you need money on a short term period, better put something to a pawnshop, get your things done and repay the loan back in order to get your collateral back.
In the case of a bitcoin loan, it's the same thing. Loaners need security in order to avoid getting scammed so they ask for collateral. Most of loan requests are a short term period. Would you sell you iPad if you know you are in need of money only for 1-2 days ?
The fact that many scammers operating in the bitcoin community have clearly an important impact on the whole collateral thing. Since you cannot trust everyone on the internet, it seems normal, in my honest opinion, to ask for a security in order to avoid getting scammed.
If you need money on a short term period, better put something to a pawnshop, get your things done and repay the loan back in order to get your collateral back.
In the case of a bitcoin loan, it's the same thing. Loaners need security in order to avoid getting scammed so they ask for collateral. Most of loan requests are a short term period. Would you sell you iPad if you know you are in need of money only for 1-2 days ?
The fact that many scammers operating in the bitcoin community have clearly an important impact on the whole collateral thing. Since you cannot trust everyone on the internet, it seems normal, in my honest opinion, to ask for a security in order to avoid getting scammed.
I know I will recieve a lot of criticism for this post, maybe even a few neg reps.
But I believe I have a valid argument here.
Why borrow money when you could just sell the collateral in the first place?
The point of the collateral breaks down here, no matter what you say.
The reason why people borrow money is because they need/want that money. They do not want to sell what they have for the money the need/want.
It does not make sense and might even be a bit stupid to think something like,
"Oh, I need $500 to pay my bills…I have an iPad lying around let me just send that to a guy online and he will give me a LOAN, when he gets the iPad. If I pay him back he will send my iPad back to me!"
It does not make any logical sense whatsoever.
It's like buying $20 for $25.
I think the "no collateral no loan" sticky should be replaced by this post because it just makes more sense.
Maybe, just maybe it would make a bit more sense if the lender asked for <50% collateral but the 110%-115% is just plain ridiculous.
Not trolling here, I am being very serious.
.But I believe I have a valid argument here.
Why borrow money when you could just sell the collateral in the first place?
The point of the collateral breaks down here, no matter what you say.
The reason why people borrow money is because they need/want that money. They do not want to sell what they have for the money the need/want.
It does not make sense and might even be a bit stupid to think something like,
"Oh, I need $500 to pay my bills…I have an iPad lying around let me just send that to a guy online and he will give me a LOAN, when he gets the iPad. If I pay him back he will send my iPad back to me!"
It does not make any logical sense whatsoever.
It's like buying $20 for $25.
I think the "no collateral no loan" sticky should be replaced by this post because it just makes more sense.
Maybe, just maybe it would make a bit more sense if the lender asked for <50% collateral but the 110%-115% is just plain ridiculous.
Not trolling here, I am being very serious.
Well people need money it`s true, but people also dont wish to renounce of their belonging. Its simple and very logical to me. No matter wich example u take u fill find that logic, after using that money they wish back what they give for collateral. Of course many people after some times decide to not take back, so for that u always ask bigger collateral then loan. I dont know why are u confused with this simple thing.
I'm not confused.
Its just stupid how people take a loan instead of selling their collateral.
People can just sell their iPads and use it for whatever pourpose they want, and they would earn back the money they sold that iPad for relatively quickly.
I don't think you understand the point of my post please reread.
Let me emphasize.
It's stupid how people take a loan instead of selling their collateral.
I know I will recieve a lot of criticism for this post, maybe even a few neg reps.
But I believe I have a valid argument here.
Why borrow money when you could just sell the collateral in the first place?
The point of the collateral breaks down here, no matter what you say.
The reason why people borrow money is because they need/want that money. They do not want to sell what they have for the money the need/want.
It does not make sense and might even be a bit stupid to think something like,
"Oh, I need $500 to pay my bills…I have an iPad lying around let me just send that to a guy online and he will give me a LOAN, when he gets the iPad. If I pay him back he will send my iPad back to me!"
It does not make any logical sense whatsoever.
It's like buying $20 for $25.
I think the "no collateral no loan" sticky should be replaced by this post because it just makes more sense.
Maybe, just maybe it would make a bit more sense if the lender asked for <50% collateral but the 110%-115% is just plain ridiculous.
Not trolling here, I am being very serious.
.But I believe I have a valid argument here.
Why borrow money when you could just sell the collateral in the first place?
The point of the collateral breaks down here, no matter what you say.
The reason why people borrow money is because they need/want that money. They do not want to sell what they have for the money the need/want.
It does not make sense and might even be a bit stupid to think something like,
"Oh, I need $500 to pay my bills…I have an iPad lying around let me just send that to a guy online and he will give me a LOAN, when he gets the iPad. If I pay him back he will send my iPad back to me!"
It does not make any logical sense whatsoever.
It's like buying $20 for $25.
I think the "no collateral no loan" sticky should be replaced by this post because it just makes more sense.
Maybe, just maybe it would make a bit more sense if the lender asked for <50% collateral but the 110%-115% is just plain ridiculous.
Not trolling here, I am being very serious.
Well people need money it`s true, but people also dont wish to renounce of their belonging. Its simple and very logical to me. No matter wich example u take u fill find that logic, after using that money they wish back what they give for collateral. Of course many people after some times decide to not take back, so for that u always ask bigger collateral then loan. I dont know why are u confused with this simple thing.
I know I will recieve a lot of criticism for this post, maybe even a few neg reps.
But I believe I have a valid argument here.
Why borrow money when you could just sell the collateral in the first place?
The point of the collateral breaks down here, no matter what you say.
The reason why people borrow money is because they need/want that money. They do not want to sell what they have for the money the need/want.
It does not make sense and might even be a bit stupid to think something like,
"Oh, I need $500 to pay my bills…I have an iPad lying around let me just send that to a guy online and he will give me a LOAN, when he gets the iPad. If I pay him back he will send my iPad back to me!"
It does not make any logical sense whatsoever.
It's like buying $20 for $25.
I think the "no collateral no loan" sticky should be replaced by this post because it just makes more sense.
Maybe, just maybe it would make a bit more sense if the lender asked for <50% collateral but the 110%-115% is just plain ridiculous.
Not trolling here, I am being very serious.
But I believe I have a valid argument here.
Why borrow money when you could just sell the collateral in the first place?
The point of the collateral breaks down here, no matter what you say.
The reason why people borrow money is because they need/want that money. They do not want to sell what they have for the money the need/want.
It does not make sense and might even be a bit stupid to think something like,
"Oh, I need $500 to pay my bills…I have an iPad lying around let me just send that to a guy online and he will give me a LOAN, when he gets the iPad. If I pay him back he will send my iPad back to me!"
It does not make any logical sense whatsoever.
It's like buying $20 for $25.
I think the "no collateral no loan" sticky should be replaced by this post because it just makes more sense.
Maybe, just maybe it would make a bit more sense if the lender asked for <50% collateral but the 110%-115% is just plain ridiculous.
Not trolling here, I am being very serious.
Jump to: