YadYap, payday spelled backward (how’s that for a rickety but innovative name), is the first people-to-people lending platform specifically for the payday loan industry. YadYap is looking forward to an official launch soon. It is interesting that I should hear about YadYap (thank you Jared) so soon after I wrote that “there will be many peer to peer lending websites.”
The Inspiration for YadYap
According to their website, YadYap was inspired by three characteristics of the payday loan industry:
- The significant need for short term loans.
- The controversy over lending rates charged.
- The lack of borrower representation in the market.
How do Borrowers Benefit from YadYap?
- Instant loan approvals.
- Funds quickly deposited to their bank account.
- Lending rates determined by the free market through a competitive auction.
- Good repayment performance is rewarded with lower interest rates and loan fees.
How do Lenders Benefit from YadYap?
- Provided with pre-screened loan applicants.
- Credit / payment history is tracked resulting in a YadYap risk rating.
- YadYap handles all documentation, fund transfers and loan administration.
- Lenders benefit from both monetary and social returns on their capital.
- YadYap takes the inefficiencies out of the market.
The biggest advantage of YadYap is the almost instant liquidity that comes from offering short term 2-4 week payday loans. Unlike Prosper and Lending Club, no secondary market is needed to achieve liquidity for lenders. When YadYap opens, this may prove to be a significant advantage for them. And maybe there will be a few less “Payday Loans Here” signs on main street as business migrates to the web.
5 Mar 2009 I removed my instant liquidity link to YadYap’s blog. All it returns is a WordPress message that reads:
This blog has been archived or suspended for a violation of our Terms of Service.
Not a good sign. I wonder if they need a payday loan to tide them over?
12 Mar 2009 Restored my instant liquidity link to YadYap’s blog, which has changed location and is now called [link no longer works]. Set aside money for a payday loan to YadYap through their platform once they launch.
19 Oct 2010 Yadyap launched. In this first phase, all lending will be done by YadYap LLC, their affiliates, and other institutional lenders.
25 Feb 2012 ConnectFund link no longer works, replaced all references to it with this bracketeted phrase: [link to longer works].