A higher effective interest rate and a profit when the full loan is repaid.
It’s one of the few ways to find "mispriced" assets in a crowded market. Just make sure you’re comfortable with the credit risk! buying loans at a discount
Because you bought the debt for "pennies on the dollar," any recovery toward the full principal represents pure profit. A higher effective interest rate and a profit
The borrower is struggling, and the lender would rather take a partial loss now than deal with a default later. buying loans at a discount