Need a down payment for a new car?  Get a loan on BTCjam!

BTCJam Car Loan

Tony first heard about BTCjam at a Bitcoin Meetup group in Los Angeles.  He liked the idea of P2P Lending right away.  It reminded him of the “freedom philosophy” that excited him about Bitcoin in the first place.

Back in June of 2011, Tony’s friend sent him an article about “fake internet money”, but the more Tony read about Bitcoin, the less it seemed like a fake and the more it seemed like something that could transform the banking system.  Tony read everything he could about Bitcoin until one day it just clicked – and he’s been buying, spending and promoting Bitcoin ever since.

In July, Tony ran into trouble.  His old car suddenly broke down.  He needed a new car immediately to get to work and to see his new girlfriend and without one, Tony could lose his job and maybe even his girlfriend.  Tony knew what to do.  He turned to BTCjam and created a loan listing to borrow money for a nice down payment for a pre-owned car. With BTCjam’s low rates for borrowers, he would actually save money in the long run, by borrowing money for his down payment at a lower interest rate than most banks would have lended it to him.

Tony’s loan funded quickly.  His loan funded easily because he completed his BTCjam profile and received personal referrals from his friends.  He was diligent in responding to comments from investors and was honest about himself in his loan description.  He explained his plans to buy the car in detail and how he would pay his loan back.  Tony is an open book and we think it was key in helping investors confidently investing in his loan.

Once his loan funded, Tony had no problems converting the Bitcoin into dollars and withdrawing it for the down payment on his car.  Tony purchased a sporty dark blue 2013 Ford Focus hatchback, and he says it’s a lot of fun.  We can also confirm that it’s been nine months since he got his loan on BTCjam and Tony still has the car, the job and the girlfriend!  Way to go Tony.  Thanks for borrowing with BTCjam…  and thanks to the investors of BTCjam for funding Tony’s loan!

Until Next Time….  Keep on Jamming!

If you need bitcoin, borrow bitcoin on BTCjam!  If you want to invest, invest on BTCjam!

BTCJam Introduces Risk Based Pricing (Interest Rates Set Automatically by Credit Score)

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BTCJam is changing the way interest rates are set in order to improve the experience for both borrowers and investors. Starting today, BTCJam will set the borrower’s interest rate automatically based upon their credit score. The higher the borrower’s credit score, the lower their interest rate.

Automatically calculating the interest rate based upon credit scoring is known as risk-based pricing and is a well known and time proven methodology within the financial services industry. Interest rates are set by a combination of the borrower’s credit rating (using BTCJam’s proprietary credit rating system) and the duration of the loan. Borrowers who are less likely to default will receive lower interest rates.  Since BTCJam has all of the information about the borrowers, we are in a better position to determine the likelihood of the borrower paying back the loan and will adjust the interest rate accordingly. Risk-based pricing makes investing easier because when a lender invests in an A-rated loan, they know that the borrower will be paying an A-level interest rate.

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Interest rates are set by a combination of the borrower’s credit rating and the duration of the loan. Borrowers who are less likely to default will receive lower interest rates.

When borrowers are allowed to set their own interest rates, it is far too tempting for them to set a low interest rate and see if investors will accept lower returns.  While a borrower who receives a very low interest rate usually pays back their loan, it does not provide the investor any cushion against possible defaults.  With risk-based pricing, the interest rates for all loans will be standardized, ensuring that investors are able to offset possible losses from defaults.

We are confident that this change will improve BTCJam and allow us to continue to maintain the highest repayment rates in peer-to-peer lending (as high as 98% for A-rated borrowers), as well as increase overall returns to investors.

Check out the changes and start investing with BTCJam.  Get a loan with a reasonable rate with BTCJam.

Risk Based Pricing (automatic interest rates) Q&A

Q: What will happen to loans that were created before the change to Risk Based Pricing?

A: Loans created prior to the adoption of Risk Based Pricing (automatic interest rates) will continue until they have either been funded or have expired. BTCJam will identify the old loans and will separate them so they will be only be accessible using filters.

Q: The system sets a rate that is too high for me and I won’t be able to repay it. What should I do?

A: If the interest rate on your loan is too high you should verify more documents and add more information to your profile. By verifying more information, you will increase your credit score and receive a lower interest rate.

Q: Do I still have the option of doing a loan tied to a local currency?

A: Yes you will still be able to choose between a Bitcoin loan and a loan tied to local currencies. Learn more about currency types.

Q: Why did BTCJam choose to change the way that interest rates are determined?

A: BTCJam changed to risk-based pricing for a number of reasons. One reason being investor and borrower security. By setting the interest rates automatically it simplifies the risk assessment for both borrowers and lenders. Learn more about risk-based pricing.

Q: Will there be a set standard for interest rates based upon credit rating? For example, will all C rated borrowers have loans set at a standard 5.5% interest regardless of profile completeness?

A: Yes, every credit score grade will now come with a set interest rate that is the same for all borrowers that have the same credit score. However, rates will change also according to the loan term. That means, a C loan for 30 days will have lower rates than a 1 year loan for a C rated  borrower.

Q: Can I pay more than the recommended interest rate?

A: No. The interest rates are now automatically linked to your credit rating.  This change protects our investors from loans that are “too good to be true” and that the borrower never intends to repay.  We took into consideration both borrowers and investors when making this change.

Problems with the IRS?  Borrow Bitcoin from BTCJam and pay them off!

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Back in December,  Tim was having some troubles with the IRS.  Due to a mistake on his 2014 taxes, he had to pay an additional $400!  And of course, the IRS wanted the money right away, with no concern at all that their request was in the middle of the Christmas Season.  The IRS wanted their money immediately with interest or the penalties would rise.  The conditions, as they say, were non-negotiable.

Tim had a problem. And to solve that problem, he turned to BTCJam.

Tim had some experience with Bitcoin before he tried BTCJam.  He used Bitcoin and even purchased a few miners, so he had no problem sending Bitcoin around (after all it’s as easy to send as email).  He just needed a little bit more to pay off the IRS.

shutterstock_192557456Tim heard about others getting loans at BTCJam to help pay back their Bitcoin miners and increase revenue.  He decided to give it a try and started out with a couple of small loans that he knew he could pay back easily.

Tim did a good job setting up his account and this helped him secure his loan.  He linked all of his social networks and completed his profile.  Tim also ensured that his loan would get investor attention by choosing a slightly higher interest rate than was recommended.  Thanks to his diligence and smart choices, Tim had no trouble at all getting his loan funded.

Tim’s loan was funded within a few hours and thanks to the speed of Bitcoin, he had no trouble wshutterstock_46032925ith glacially slow bank transfers that could have resulted in additional late fees.

Tim has big plans for his future on BTCJam and plans to continue having a few small loans open as he expands his Bitcoin mining operation.  Someday, Tim hopes to retire on the proceeds.

Thanks to the support of BTCJam and the BTCJam investors, Tim was able to pay off the IRS quickly with no additional penalties.  As Tim says “They love me again.”

Another great ending to a great story, thanks to the investors of BTCJam who supported Tim.

Until Next Time….    Keep on Jamming!

If you need money, borrow bitcoins on BTCJam!  If you want high returns, invest on BTCJam!







 

Peer-to-Peer Lending Will Change Developing Countries

Scenario: You are a middle-aged labor worker in Sao Paulo, Brazil making minimum wage which is about $310 a month. Your wife has just given birth to your second child meanwhile living expenses have been depleted and you are in debt with one of your two credit cards from paying for medical operation and basic needs. You are faced with paying almost 200% APR on this debt, and your loan application to banks have been denied because of your negative credit rating.

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Unfortunately this is common situation in many developing countries. Hard-working individuals are financially trapped, tricked into accumulating more debt by payday loan providers, and they rarely triumph over these barriers, which prevent them from living a stable life.

People in Developing Countries need of solution that will:

  • Provide reasonable, equal opportunity interest rates
  • Have an easy application
  • Use a payment protocol that can transcend borders
  • Be transparent and efficient
  • Empower the individual

This is what peer-to-peer to lending powered by Bitcoin does.

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Taking out a loan on BTCJam is as easy as a few clicks; simply submit your identity documents to prove you are a real person. When creating a loan, you are given a suggested interest rate determined by the credit scoring algorithm; however, you may choose whichever rate works best for you. This effective and labor-saving process permits anyone to get a loan from the comfort of their own home regardless of origin, financial history, and state determined credit rating. Anyone with internet access has the opportunity to get a loan without going through unnecessary intermediaries.

With peer-to-peer lending using Bitcoin, entrepreneurs from developing countries are able to take out loans that they would not otherwise have access to and put the funds towards their ventures. For example, Gaston Azzollini, an Argentine borrower on BTCJam’s platform, has taken out a series of loans to put towards his various businesses in Villa Carlos Paz, Argentina. One of them is the restaurant Lo De Elvio where all BTCJammers are welcome to dine at a discounted rate.

Economies of local communities are being funded on a macro-level because of Bitcoin. BTCJam’s peer-to-peer lending platform is helping to strengthen the economies of developing countries while providing 24/7 nondiscriminatory access for consumer loans.

Plant your seed of Bitcoin today.

Photos of Gaston and his restraunt Lo De Elvio in Villa Carlos Paz, Argentina

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