ILAB 91 – Behavioral Finance in P2P Lending with Laura Gonzalez

“Do not look too much on the photo and pay more attention to data.”

Laura Gonzalez

Laura Gonzalez is an Associate Professor in Finance at California State University with over 10 years of experience in teaching finance courses. One of the studies she took interest in is behavioral finance in peer to peer (P2P) lending which they conducted an experiment on it.

During the episode, Laura reveals the major biases of lenders in terms of approving loans apart from their credit information. She explains the theory of beauty premium which significantly influence the decision of lenders. She also explains how they conducted the experiment to test this theory and what considerable indications were acquired.

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ILAB 91 Show Notes

Where we are:

Johnny – Nepal

Sam – Florida





Fundrise – start with only $1,000 into their REIT funds (non-accredited investors OK)

PeerStreet – get a 1% yield bump on your first loan

ArtofFX – start with just a $10,000 account (reduced from $25,000)

Wealthfront – get your first $15,000 managed free

RealtyShares – try it free


ILAB 13 – PeerStreet vs. Lending Club

ILAB 45 – Behavioral Finance and How Betterment is Optimizing Around It


Time Stamps:

05:31 – Laura’s background

07:07 – History of P2P lending

11:40 – Growth of the P2P market

13:09 – P2P platforms

16:08 – Major biases in approval of loans

19:22 – Beauty Premium

24:01 – The conduct of the experiment

25:02 – Findings and indications

30:00 – Outcome based on biases

32:39 – What to consider when lending someone

34:49 – Information available on Prosper

37:02 – Repayment success rate in various countries

39:23 – Prosper vs. Lending Club




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