The person taking out the loan doesn't need to judge the statistical risk or develop an algorithm to compute it, just the individual one.
It's like the insurance when you rent a piece of equipment. The insurance is $8 every time because they judge that to be the statistical risk. Sometimes I'm doing something sketchy and take them up on it. Sometimes I'm not and I don't. The problem is a very simple one on my side but very complex on theirs.
It's like the insurance when you rent a piece of equipment. The insurance is $8 every time because they judge that to be the statistical risk. Sometimes I'm doing something sketchy and take them up on it. Sometimes I'm not and I don't. The problem is a very simple one on my side but very complex on theirs.