Marketplace Lending and Consumer Credit Outcomes: Evidence from Prosper

Timothy E. Dore and Traci L. Mach
Additional contact information
Timothy E. Dore: https://www.federalreserve.gov/econres/tim-e-dore.htm
Traci L. Mach: https://www.federalreserve.gov/econres/traci-l-mach.htm

No 2019-022, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: In 2005, Prosper launched the first peer-to-peer lending website in the US, allowing for consumers to apply for and receive loans entirely online. To understand the effect of this new credit source, we match application-level data from Prosper to credit bureau data. Post application, borrowers' credit scores increase and their credit card utilization rates fall relative to non-borrowers in the short run. In the longer run, total debt levels for borrowers are higher that of non-borrowers. Differences in mortgage debt are particularly large and increasing over time. Despite increased debt levels relative to non-borrowers, delinquency rates for borrowers are significantly lower.

Keywords: Marketplace lending; Online lending; Peer-to-peer lending; Prosper marketplace; Disintermediation (search for similar items in EconPapers)
JEL-codes: G20 G23 G29 (search for similar items in EconPapers)
Pages: 65 pages
Date: 2019-04-02
New Economics Papers: this item is included in nep-ban, nep-pay and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.federalreserve.gov/econres/feds/files/2019022pap.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2019-22

DOI: 10.17016/FEDS.2019.022

Access Statistics for this paper

More papers in Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().