Peer-To-Peer Lending: How The Process Works

Peer-to-peer lending, as the Club of Prosper.com and take a dip in the world, offering borrowers a simple, unsecured loans, interest rates, which are much more competitive than that offered by most banks and credit unions. These companies offer a year, three years and five years, fixed-rate loans to borrowers with good credit interest rate to 6%. The prices are so good that borrowers are out of debt refinancing of credit cards and other personal loans from a peer-to-peer lending. How to Prosper and Lending Club is offering a competitive interest rate loans? The answer lies in where the money comes from individual investors.

When a bank lends money to the borrower, they do so with money that is lent to their savers. The Bank can offer savers 3% return on a CD or savings account and a loan from any the money from 7% to 30% depending on the loan, pocketing the difference. The goal of peer-to-peer lending sites to bypass banks and allow investors to lend directly to borrowers, without any intermediary. As a result, borrowers will receive a much better interest rate and investors can not get a greater return on their money.

The process of applying for a loan peer-to-peer is relatively simple. Borrowers with a simple application process or loan Prosper Club website. It will tell you what interest rate you can borrow money at this time. If you like the loan offer, you can complete your application and the loan announcement will be made available to investors in the market for ready-to-peer among peers. Investors will have two weeks to fund your loan. After the loan is fully funded the loan will be transferred to your account. A month later, to make his first payment automatically. Lending Club and Prosper handle all the paperwork and transactions for lenders, so the reimbursement process is incredibly easy.

If you are a lender, the process begins to invest in peer-to-peer lending has never been easier. Unfortunately, few states whose legal framework is not compatible with the investment in peer-to-peer loans, so make sure you can be a lender before you sign. Creation process takes into account every 15 minutes. After getting your account setup, you simply transfer the funds to the account of your investor. A few days later, your funds are available, and you can start investing in individual notes on the loan market peer-to-peer you choose. As borrowers make payments, you will receive your share of the payment of the borrower and funds will be automatically credited to your investor. At that time, you can reinvest the money or out of your account.

Being involved in a peer-to-peer lending is easier than ever. There is more interest for borrowers and lenders at any other time in history.