Find a secured or unsecured personal loan you need with the best rates and terms available for your credit situation.
Learn more about why these loans are lower risk for a consumer.
See how loans can be made without having to go through a financial institution.
A secured or conventional loan is usually riskier to have, but comes with a lower interest rate.
Learn why these types of loans should only be used in the event of an emergency.
What Is Peer-to-Peer Lending?
The concept behind peer-to-peer lending is not a new one. People have been lending socially - without the use of a bank - since the beginning of time. If you've ever borrowed money from a friend or relative, you've already participated in one of fastest growing lending programs currently available.
Online peer-to-peer lending was initially introduced in February 2005 and has since centered around two major companies that combine to lend out more than $50,000,000 a month through their platforms.
Peer-to-peer loans, also known as social loans or person-to-person loans, typically involves unsecured personal loans (an unsecured loan is a type of loan that doesn't use something you own as collateral).
The interest rates on an unsecured personal loan are determined based on the kind of credit you have. For those with poor or bad credit, the interest rates may be much higher.
Peer-to-peer loans can give those with lower credit scores the opportunity to be approved for the money that a bank or other financial institution would otherwise turn them down for.
Peer-to-Peer Lending Features:
- Loans are unsecured and can be used for both personal and business purposes
- Loan amounts range from $1,000 - $35,000.
- Low fixed interest rates.
- No prepayment penalties.
- Terms range from three to five years.
Peer-to-Peer Loan Process
The process of obtaining a loan with a peer-to-peer lender is fairly simple. First, you will need to join one of the major peer-to-peer (or P2P) lending websites by filling out their online application. You will be required to be 18 years or older, a U.S. citizen, have a Social Security number, and a valid checking account. Once the application is completed and submitted online, you'll be notified immediately if you are pre-qualified. If the lender can help, you'll be given a selection of rates, terms, and loan approval amounts for which you are qualified to receive. If the terms are suitable, you can review, agree to, and sign all paperwork online. This process will save you time and the hassle faxing in pages of paperwork. After you agree to the terms and provide any additional information needed, you will need to create a listing. This listing is what will be shown to potential investors.
The listing you create allows the investors to evaluate your situation and decide if they want to contribute to your loan. An investor can lend you a portion or the full amount of money you're requesting. This means depending on the investors you attract, your loan may have one or many people all pooling their money together to make your loan a reality.
As the borrower, you are only required to make one payment each month directly back to the peer-to-peer company, which in turn distributes your payment amongst the different investors accordingly. The peer-to-peer lending company's role is to provide a layer of privacy between you and the investors — the investors will never know your personal details or contact information.
Peer-to-peer lending is a great option if you need money unsecured. If you are unsure about taking a loan with a peer-to-peer provider, feel free to contact AmOne. We can help you determine if this is an ideal loan option and can help you learn about what other options may be available to you. AmOne provides expert assistance for free. We're able to match you with a highly rated financial solution for your needs through the use of our online matching system. We use public feedback to provide you with the most trusted loan solutions currently available in today's loan market.
To learn more, simply fill our short peer-to-peer personal loan form or give us a call toll-free at 1-800-781-5187. Our financial search specialists will be able to answer your questions and our service is always free.