I'm Nicole Lapin, the only financial expert you don't need a dictionary to understand.

It's time for up against you.

Lending. Recently I talked to Scott Sandburn, the CEO of Lending Club,

who is also passionate about making the system more equitable.

Later in this episode, I'm going to be giving you a winning strategy to use

when managing your money.

But first, here's a little background from Scott.

So the traditional lending systems obviously didn't work for everyone, but first, let's talk about the folks that it did work well for

like traditional lending systems did work well for I suppose people that had money.

Even I you know, work well.

You had the ability to go get a loan.

And in the case where we started, if you look at personal loans, those went away when credit

cards came, right?

So basically what happened is banks as a whole said if you need access to cash, use this instead. And there's a reason that banks hold credit card assets on their balance sheet, and it's a reason why some of the biggest banks in the country also happen to have that as a core profit engine is that is a very profitable vehicle for a bank and for a consumer it is a very convenient way to pay

for stuff but if you're actually using it as a loan it's a pretty crappy loan.

It's a high interest rate and it is a floating rate. So, you know, again, I would say does it work? Yes. But does it work well for the for the actual purpose of borrowing money?

The answer is no because it's loaded with all of this,

you know, all of these perks and benefits and bonuses that are, you know, gosh,

they allow you to get, you know, discounts at Macy's or, you know, whatever,

gear from the giants, right? They have all these fan-based programs that add a lot of expenses.

That mean, the actual core function of getting access to low cost credit is not actually great.

It was not great.

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