Social borrowing is on the horizon

Can’t seem to find a mortgage lender you like? Instead, borrow from a friend – or several of them. According to reports, a new platform known as Celsius may make peer-to-peer mortgage lending a viable option.

Peer-to-peer lending (P2P mortgage)

Celsius is developing a peer-to-peer lending network aimed specifically at the Millennial market using blockchain technology. According to the company’s founder, Alex Mashinsky, the platform will allow younger buyers to secure funding through their social network rather than large banks and financial institutions.

Financial credit, according to Mashinsky, is becoming increasingly difficult to obtain for today’s youth.

The specifics

So, how does it work? To begin, each user develops a digital profile. They will be required to submit FICO scores, online transaction histories, and other non-traditional financial data. Then, Celsius will assign a credit score that is unique to the site to each profile.

Celsius will provide lenders with insurance that covers a percentage of the principal loan amount in the event of a default. In addition, the company will recover any funds owed to the lender or lenders involved in the transaction.