Marketplace Lending Series: How to Avoid Stackers

This piece addresses “stacking” -- borrowers obtaining multiple loans simultaneously and becoming unable to meet payment obligations -- and outlines four strategies for lenders.

First, hire experienced risk teams who know the major subprime bureaus and can spot real-time application bursts across lead generators. Second, monitor bank transactions for trial deposits from entities like Cross River Bank or WebBank that signal prior lending activity, reviewing 90 days to 3 years of history.

Third, account for existing debt rather than rejecting applicants outright -- adjust loan offers to genuine repayment capacity. Fourth, continuously pull credit reports to track remaining balances from competing lenders and recall loans per agreement terms when needed.