What Is Peer-to-Peer Lending?
The concept behind peer-to-peer
personal loans 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 loans were 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.
Online 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 personal 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:
- Online peer-to-peer loans are unsecured and can be used for both personal and business purposes
- Peer-to-peer personal loan amounts range from $1,000 – $35,000.
- Low fixed interest rates.
- No prepayment penalties.
- Terms range from three to five years.
Online Peer-to-Peer Loan Process
The
process of obtaining a personal 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 for an online peer-to-peer loan. 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
peer-to-peer personal 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.
Online 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 888-401-0330. Our financial search specialists will be able to answer
your questions and our service is always free.
