Marketplace lenders Prosper and Lending Club charge consumers lower interest rates on average than do credit card companies, a US Federal Reserve economist’s study found.
Most borrowers from the two biggest peer-to-peer (P2P) lenders use the loans, which average $15,000, to consolidate debt, Fed economist Robert Adams said in a blog. Borrowers have eight bank cards on average.
“Even though borrowers seem to be switching from credit cards to P2P loans, the anecdotal evidence presented in this note indicates that competition is muted,” the blog this week said. “P2P lenders appear to be able to take advantage of rate rigidities to attract customers, but rate spreads need to be large enough to get borrowers to switch.”
Fintech lenders charge lower interest rates than do credit card companies, study finds
24 October 2018 7:26am