What Is Peer-To-Peer Lending

Peer-To-Peer lending is when individuals contribute small amounts of money that is pooled together to make a loan to someone.  In return investors receive interest based on the amount they contribute.

Peer-To-Peer lending is also referred to as Social Lending or P2P lending.

What Does It Cost To Use Peer-To-Peer Lending

It cost nothing to sign up to use the service at any of the sites.  However, you have to pay interest on the loan.  Interest are usually lower than traditional sources such as banks.

Lending sites charge 1-3% (depending on your credit rating) as a closing fee.

Some lending sites will also charge a 0-1% annual loan servicing fee depending on your credit rating.

How Does Peer-To-Peer Lending Work

Borrowers signup at websites that offer Peer-To-Peer lending and create their profile which stipulates how much they want to borrow and how they intend to use the money.

The borrower stipulate how much interest rate they are willing to pay.

Lenders compete to meet the borrower's requirement.

Once enough lenders agree to lend the money the borrower is funded.

The borrower has to agree to a repayment schedule and interest rate.

Why Use Peer-To-Peer Lending

Peer-To-Peer lending avoids the lengthy and bureaucratic challenges pose by banks. 

You receive the money without having to develop a complicated business plan and fill out countless forms.

The process is quicker and you do not have to wait long to get your money.

Implementing Peer-To-Peer Lendnig

Below is a list of resources that you can utilize to
access Peer-To-Peer lending:

Organization

Loan Amount

Description
Funding Circle any amount

Funding Circle is a peer-to-peer lending marketplace that allows investors to lend money directly to small and medium-sized businesses. Funding Circle was the first website to use the process of peer-to-peer lending for business funding in the UK, and now operates in the UK, US, Germany, and the Netherlands.
Lending Club up to $35,000

Interest rates starts at 5.78%
Lendingtree any amount Lends at low interest rates.
Peerform up to $25,000

Get fast approval for unsecured and no collateral loans from this peer-to-peer platform.
Peer Lending Network any amount

Charges a 1-3% closing fee and a 0-1% annual service fee depending on your credit rating.
Prosper $2000 - $25,000 Lends from $2,000to $25,000 in loans. Interest Rates starts at 6.59%.
WikiLoans $500 - $25,000 Let lenders set their own interest rates and borrowers set the rate they want to pay.