Reply #5: The sad thing is even w/ 3% -6% split the potential margins are huge. [View All]

[Statistical]

Say you borrow $1000 at 3%. Due to the magic of fractional reserves you can lend $10,000 at 6%.

Assuming no losses your gross margins are something like 60% on assets under deposit. Even with reasonable loss rates, overhead, and fraud you can profit handsomely.

Of course that requires tighter underwriting standards, you know actually doing some work. Not lend to everyone on the planet at insane rates and hope you come out ahead.