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I found this user who has loaned almost $300,000 across 1800 transactions for anyone who is interested in some statistics: https://old.reddit.com/r/borrow/comments/18h8yq4/paid_uinfin...
Fascinating. That seems like a profitable business almost.
Who would loan to someone with this record? More likely money laundering.
No, he has loaned that amount (not taken loans of that amount) He is the lender.
I lent there many times a couple of years ago.

I always insisted that I was only paid back what I had lent. I stopped doing this when I was not paid back several times in a row.

As a frequent reader what I noticed was that people were repeatedly coming back. They might ask for £250, they repay with whatever 'interest' was asked, and then they post again asking more money. As the user's payment history is posted, and they seem trustworthy, they get the new loan. Repeat and repeat.

They are forever trapped in a cycle of paying more back and from what they ask - it's never for what might be called luxuries - they slowly sink.

So while I saw it as useful, and indeed it may be for some, there are others who are effectively being financially abused and they have no way out of that loop.

the usual "the whales pay for all the fishes"
This is fascinating and the interest rates are nuts. The current top post is asking for $400 with plans to repay a total of $475 by the 25th which ChatGPT says is a 526% interest rate.

What’s the deal here? Are most borrowers scams? Is there no better option for the financially vulnerable? I’ll try to convince my wife it’s worth an experiment.

that interest is about middle of the road for payday loans (UK maximum is 1,800%). The issues are a) high overhead for small loan amounts b) high risk of non-repayment, and c) lack of other options for the borrower. The result is not very pleasant: generally speaking lenders lose out on most loans (either because they are never paid back or paid back quickly), but make the money back from people stuck in the middle and pay back much, much more than the original loan amount because it takes them a long time, another 'cost of being poor'. There's varying degrees of regulation to prevent the worst abuses (for example, in the UK the payback amount is capped at twice what you borrowed) but it's still not great.
I wonder if it would be profitable to make a bot that borrows money on here and doesn't pay it back.
> I wonder if it would be profitable to make a bot that borrows money on here and doesn't pay it back.

It seems like the bot would have to make a new account once the previous one is burned/flagged

Lending money to strangers on the internet without recourse is profitable until it isn't. I assume the only currency trust is a web-of-trust and some type of "+/-" ratings system; which totally works until it doesn't.

These are gifts to some people, not loans. Loans are enforceable contracts.

I've never thought about being the other side of being a loan shark. Is there any regulation about actually making these loans to people? (There is sure as hell regulation about collecting the debt, so I suspect the answer is yes here too.)
I wonder if it would be profitable to make a bot that lends out money on here.
I suspect you'd run into law enforcement pretty quick.

Also, I think you'd make a loss, with 50+ percent of loans not paid back.

If the average interest rate is 250% then 70% of them could default and I'd still make money.
An anualized interest rate far over 250% is easy to find there. However, these are short term loans. In order to see a 250% return on a 250% anualized rate, you need to have your money lent out for a year. If each loan lasts a month, then you need to loan to 12 borrowers. If any of them default, you get nothing.
The thing to do would be to have a lot of loans running all the time. So start with $10k and loan it out eg $500 at a time, starting with 20 loans. If "default" means you get no money paid back, and each loan pays 20% (not annualized, just 20%), and assuming borrows either payback the loan with proper interest or default and pay nothing back, then breakeven would be about a 17% default rate. I would expect a much higher default rate for lending money to strangers on the internet, but who knows.

It seems the enforcement mechanism here is just reddit accounts. Accounts have to be a few months old with minimum karma. Fail to pay back a loan and your account gets banned and you have to start a new one. Not a huge barrier but not a tiny one either.

I'm not following the logic. Assuming that I'm not loaning out all the money I have all the time, but rather if I have enough without any repayments to make those 12 loans then defaulting one only loses one, not all. So just don't over-leverage.
An annualize interest rate of 250% for a 1 month term means a 1.08% actual interest rate. If just 8% of your loans default you lose money.

A 70% default rate would mean that you expect lose 68% of your money every month.

Sure, you don't go to 0. But you need a very high repayment rate for short term loans to work; and very difficult to interest your way out of the problem.

You could use the kelley criterion plus an estimate of default risk and loan to several people simultaneously
Why run into law enforcement?
there are legal requirements for being a money lender