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Lending money to someone can be a difficult decision. The only two items that should come to mind are the interest rate and likelihood of repayment. Income should be factored into the probability of repayment, but there is more at play than is visible in a profile on Lending Club or Prosper. Take the example of Britney Spears’ lavish spending. Her monthly income is $737K but she has managed to save nothing and spends more than $100K per month on gifts and travel. Britney has a high mortgage payment, but would have a reasonable debt to income ratio. Risk is a much more complex decision than simply the Debt to Income ratio since Britney’s behavior leads one to believe that she might be a high credit risk.

Britney Spears and her lavish spending are in good celebrity company. Michal Jackson, the King of Pop Music, is on the verge of losing Neverland ranch, which has been in financial risk for several years now. Michael is such a poor credit risk, that he is not even living up to obligations promised to the only person to provide him financial support after his infamous trial — Bahrain Prince Abdulla Al-Khalifa.

Other celebrities who were poor credit risks include MC Hammer who files for bankrupcy on $13 million after his second album flopped. His poor spending habits lead him to spend more than $75 thousand on mirrors and $2 million on marble floors for a house. Even worse were his purchases of 17 luxury cars, 2 helicopters, and million dollar investments in race horses. According to Foxnews, Lindsey Lohan spent more than $2 million on clothes last year and TLC was also a financial fiasco. Although, there are positive examples, Usher is said to have spent less than 10% of all the money he has earned. In addition to Usher, other rappers seem to be doing better since MC Hammer:

Rapper Jay-Z owns a stake in the New Jersey Nets, co-owns the Rocawear clothing line and is president of Universal Music Group’s Def Jam Recording.Sean “Diddy” Combs has interests in Bad Boy Records, the clothing lines Sean John and Sean by Sean Combs, a movie production company and two restaurants.

And Def Jam Records co-founder Russell Simmons owns a management company, a clothing line called Phat Farm, a movie production house, TV shows, a magazine and an advertising agency.

The three men are worth approximately $547 million, $358 million and $340 million respectively.

So if Britney Spears (or Michael Jackson for that matter) appear asking for a loan on Prosper on Lending club, it would be a good idea to run the other direction.