&gt; [... I am worried that there are borrowers who have figured out how to game the system]<p>I thought this as well, but on LendingClub.<p>Out of all of my notes that have defaulted, they all seem to share the same pattern:<p>They make about 4 perfectly on-time payments then never make another payment again.<p>I believe the loans were taken out by real people, but I feel like they were people who knew that they were ultimately going to file for bankruptcy anyway, so they figured they might as well grab some quick cash before doing so. This is just my guess. It just seems too odd that all of my defaulted notes look pretty much the same. Maybe the 4 on-time payments were done to avoid any claims of fraudulent intent?<p>My fear was that there was some Reddit thread or something which was instructing people on how to do this.<p>They could have done the same thing with a credit card, but with LendingClub, you end up with actual cash, and I bet it&#x27;s easier to get a loan funded on LendingClub than it is to apply for a credit card of the same amount.<p>[EDIT]: To add, apparently, if someone obtains a loan immediately before filing for bankruptcy, the creditor can move to basically have the loan un-wipable if they can prove that the loan was taken after the person already knew they were going to file for bankruptcy. However, I doubt LendingClub goes through this trouble for each note, which could make the platform more attractive for this type of fraud.