Finding Peer to Peer Lending Sites
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Everyone has at one time or another needed to borrow some money from a friend or relative. It can be a sticky situation at best and can result in long-term problems between borrower and lender. However, there is a new business surfacing on the web that helps family, friends and total strangers arrange loans together. Peer to peer lending sites are abundant on the web and can be a life ring for people who just can’t get a loan from a bank. They are also there to help lenders earn a fair rate of return with little risk involved. Using these sites also eliminates many questions that sometimes arise with a peer to peer loan. Answers to how much to loan, what to charge for interest, the length of the loan and reminders about payments are taken on by the lending site rather than being something the lender has to worry about.
Peer to peer loans are transactions between people which essentially eliminate the middle man. This reduces interest rates that are always attached to bank loans and credit card debt. The sites make their money by charging a fee for arranging and servicing the loan rather than through interest charges. The process is quite simple: All the borrower does is apply for a loan for a specific amount and indicate what interest rate he is willing to pay. Then, a bid goes out to potential lenders to finance the entire loan or just part of the loan. The bidders with the lowest rates win the loan contract. An initial fee of between one and two percent is charged to the borrower and an annual service fee of between 0.5 and one percent is charged to the lender.
Peer to peer lending sites are really catching on throughout the United States. They offer an attractive alternative to any loan charging a high interest rate. They also are accessible to borrowers who may not have a stellar credit rating and have not been able to find a loan anywhere else. Lenders can invest as little as $50.00 to get started and are very exciting about earning higher returns than on other investments such as CDs.
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