Dow Jones Institutional News by Telis Demos (10/29/15): Securitizations–or the packaging and slicing up–of online “peer to peer” loans for students and consumers are $4.2B to date, with $3.2B issued this year alone, according to PeerIQ, a startup that collects data on the online lending business. These sales of loan packages are critical to the industry’s growth, as demand for these loans by big institutions can help lower their costs and keep the online lenders competitive against their traditional bank rivals. So far, it’s not quite there: Rates demanded by investors are higher than for standard loans packaged together, on average 3.6% to 6.5%, versus 0.9% and 2.8% for traditional loans, PeerIQ said.
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