Buying - Loans At A Discount

Because you bought the debt for "pennies on the dollar," any recovery toward the full principal represents pure profit.

Most people think of lending as a "primary" activity—you give money, they pay you back. But the real meat is often in the . Buying loans at a discount allows for two types of gains: buying loans at a discount

A higher effective interest rate and a profit when the full loan is repaid. Because you bought the debt for "pennies on

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The borrower is struggling, and the lender would rather take a partial loss now than deal with a default later.