Default Risk
Default risk describes the risk that a borrower may not be able to meet its payment obligations, which in the worst case may lead to a partial or even total default. This risk is quantified by a default rate, also known as a loss rate.
In order to minimize the risk of default, Crowd4Cash uses a multi-stage credit check and risk process based on external databases of leading credit agencies. This ensures a thorough assessment and careful selection of the loan projects applied for. The process uses intelligent algorithms and several decisive criteria. In addition, mandatory documents are part of the review process. The combination of internal and external quality features results in prudent lending, which is reflected in a rejection rate of over 80%.
The score, which reflects the borrower's creditworthiness, is an indicator of default risk. Lower scores indicate a higher risk and are usually compensated with a correspondingly higher interest rate. The default rate for all loans issued by Crowd4Cash is less than one percent.
This comprehensive approach ensures responsible lending where default risk is kept to a minimum. Crowd4Cash is committed to ensuring financial security for both borrowers and lenders.