Poll

What is your position on the ethics of a medical loan?

Pure business transaction - somebody is going to fund these might as well be me
10 (52.6%)
Always fund medical loans, be more permissive - lend a hand to someone in need!
1 (5.3%)
Never fund medical loans, filter them out - don't take advantage of people's misfortune
5 (26.3%)
Not sure
3 (15.8%)

Total Members Voted: 19

Author Topic: Morality question - medical expenses  (Read 6110 times)

rj2

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Morality question - medical expenses
« on: June 14, 2015, 01:35:53 PM »

This is my first post -- I've just signed up with Lending Club and transferred one of my IRA's there. I think it's fantastic, and I have lurked through this forum as I've learned and gotten myself started. Thanks for all the useful information!

Wanted to kick off a debate on ethics on a particular topic, loans for medical expenses.

First, I want to say that I think P2P lending in general is a fantastic thing, and that overall I feel very good about participating, both in terms of it being a good way to diversify some of my investments into a new asset category, and secondly in terms of it being a valuable and excellent service. I generally feel happy that at some level I'm helping people sort out their lives - many people who move to get a debt consolidation loan are doing the right thing, taking their situation seriously, and working to improve their lives. From an ethical perspective I feel happy to be part of it, I see it as a big win-win.

Where I become a little troubled is when I see someone taking out a loan at a high interest rate to pay a medical expense. We aren't told who is behind these loans, we only see some statistics about their credit profile. But some of these stories must be heartbreaking: people in crisis, facing an illness they cannot afford to treat, seeking a loan in order to pay for treatment for themselves or for their children.

How do you feel about funding these sorts of loans, and what in your opinion is the most ethical position to take:

a) Pure business transaction, ignore the ethics - somebody will fund these may as well be me!

b) Always fund medical loans, be more permissive - lend a hand!

c) Never fund medical loans, exclude them with filters - don't take advantage of people!

d) ?

Currently I have taken the position of always funding medical loans. Since I have tended to invest in higher yield / higher risk loans, this means I have gone back into the 'A' and 'B' category and funded some medical loans that I otherwise wouldn't have. However, my wife said I am a "blood sucker" and  "vampire" for taking advantage of people by lending to medical loans in the 'F' and 'G' categories with very high interest rates.

What are your thoughts?


Fred93

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Re: Morality question - medical expenses
« Reply #1 on: June 14, 2015, 03:07:20 PM »
Where I become a little troubled is when I see someone taking out a loan at a high interest rate to pay a medical expense. We aren't told who is behind these loans... But some of these stories must be heartbreaking: people in crisis, facing an illness they cannot afford to treat, seeking a loan in order to pay for treatment for themselves or for their children.

You are extrapolating.  Letting your imagination run away.

It is likely true that SOME of the people taking out a medical loan are in dire straits with a severe medical condition, but the same is likely true of some people who check the "pay off my credit cards" box.  You just don't have the info to know.

Also, it is surely true that SOME of the people who check the "medical" box are going for breast enhancement for purely narcissistic reasons.  Would they trigger your sympathies?

The applicants for P2P loans have not been vetted for their suitability as charity recipients. 

Don't get me wrong, charity is a fine thing.  I suggest you find some charity that helps people with medical expenses, and direct your charity dollars there.  They'd be in a better position to identify folks in need.  Personally, I support Father Joe's Villages in San Diego.  Among other things they run a huge medical & dental clinic for the homeless.  (One day a month it converts to a veterinary clinic for the pets of the homeless.) 

I suggest you avoid mixing P2P lending and charity.

rawraw

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Re: Morality question - medical expenses
« Reply #2 on: June 14, 2015, 05:06:16 PM »
I am not forcing an interest rate on anyone.  It is not my job to decide what they should and shouldn't do or pay.  Thinking that it is my job assumes I'm too valuable imo

BruiserB

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Morality question - medical expenses
« Reply #3 on: June 14, 2015, 07:00:23 PM »
I guess I'm a blend of A & C.   P2P is purely business for me. When I reviewed the notes by purpose I invested in during my first year or so, I discovered that Medical was my only category with a negative return. 

Most of Peter's filters only lend to people who list Loan Consolidation or Credit Card as purpose. I have also noticed that other credit modeling filters I have used (P2P Picks and LendingRobot) very rarely will pick a medical loan.

So I would sum it up by saying I rarely lend to Medical loans, not out of compassion, but for business reasons only.  The only unfortunate thing is that the loan categories are self reported so there's nothing saying that many Debt Consolidation loans aren't going to pay off medical debt.


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Fred

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Re: Morality question - medical expenses
« Reply #4 on: June 15, 2015, 04:23:46 AM »
I keep these 2 things separate: investment, charity.

For me, P2P is investment.

If I want to give charity I'd give my contribution to qualified 501c3  organizations (red cross, local churches, etc.). No interests; not even an expectation of anything coming back to me; purely for charity purposes.

Luke

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Re: Morality question - medical expenses
« Reply #5 on: June 16, 2015, 04:50:28 PM »
I agree with the notion that investments and charity should be separated. Additionally, unverifiable information about the use of funds makes P2P lending a bad candidate for charity in the first place. In regards to medical loans from an investment standpoint, the interest rate charged should not be viewed as stifling a borrower. In the same way that access to credit helps a business grow, a P2P loan can finance care that a patient might otherwise go without.

faeriering

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Re: Morality question - medical expenses
« Reply #6 on: June 27, 2015, 01:58:03 PM »
Is funding someone's breast enhancement any more narcissistic than funding the purchase of an expensive car or a swimming pool or a big weeding or getting the latest and greatest 4 wheeler? 

We had a discussion on the forum some years ago about medical expenses indicating an inability to work.  This might be the case, but there are other instances where having a procedure (sciatic nerve back surgery) may make someone more employable. . . it really depends on the procedure which of course we have no mechanism for knowing.

I'd say in general I don't fund medical categories as statistically at the grades of notes I look at, they don't perform well as well as the main categories I target.  (weddings and cars and vacations are usually off my list too).

Rob L

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Re: Morality question - medical expenses
« Reply #7 on: June 27, 2015, 06:52:55 PM »
I haven't had much luck with medical loans.
Of 6,652 loans I've only funded 73 medical.
What can I say. I'm not making this up. Judge for yourselves.
If anyone's considering making charitable donations, Saint Jude Children's Hospital in Memphis,TN is a very worthy cause.



PS: Above table provided by Interest Radar which I highly recommend (soon to be merged into BlueVestment)

« Last Edit: June 27, 2015, 07:16:10 PM by Rob L »

lascott

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Re: Morality question - medical expenses
« Reply #8 on: June 27, 2015, 07:11:24 PM »
PS: Above table provided by Interest Radar which I highly recommend (soon to be merged into NSR)
Interest Radar is partnered with BlueVestment and not NSR.
NSR (NickelSteamRoller) "partnered" with LendAcademy Invest to create NSR Invest.
« Last Edit: June 27, 2015, 07:33:20 PM by lascott »
Tools I use: (main) BlueVestment: https://www.bluevestment.com/app/pricing + https://www.interestradar.com/ , (others) Lending Robot referral link: https://www.lendingrobot.com/ref/scott473/  & Peercube referral code: DFVA9Y

Rob L

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Re: Morality question - medical expenses
« Reply #9 on: June 27, 2015, 07:16:33 PM »
Thanks! I fixed it. Hard to keep track of the M&A activity lately.

nonattender

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Re: Morality question - medical expenses
« Reply #10 on: June 28, 2015, 01:51:49 AM »
This is business;  the moral question is whether the loan is paid as agreed.
A little nonsense now and then is relished by the wisest men.

jennrod12

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Re: Morality question - medical expenses
« Reply #11 on: September 30, 2015, 03:46:05 PM »
Newby here, reading old posts. 

To the original poster:  I don't see how anyone could say you are taking advantage of someone by funding the loan that THEY requested.  They knew the interest rate in advance, and it's likely better than the one on their credit card.  If this load doesn't get funded, where will they get the money?  I think you're doing them a favor.

Jenn

yojoakak

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Re: Morality question - medical expenses
« Reply #12 on: September 30, 2015, 05:33:46 PM »
I got burned on a couple of medical loans. Never again.