Does borrowers' impatience disclose their hidden information about default risk?

This chapter provides new evidence on borrowers' hidden information about their riskiness and its link to their impatience. To do so, I analyze consumer loans on the German platform Smava, which has a unique peer-to-peer lending process. Observationally identical but unobservably riskier borrowers offer investors a higher interest rate. This helps them to obtain their loan faster and with a higher probability. Very impatient borrowers who use Smava's instant loan service pay a higher interest rate and have a higher default risk than less impatient borrowers. These findings suggest that borrowers' impatience can be used to screen their riskiness.