Online Stock Trading - Cut Out the Bank Get a Loan From Individuals
In these difficult economic times where credit is being well and truly crunched, many people are seeking alternative sources of funding. One way of obtaining a loan which is growing in popularity due to the widespread use of the Internet is so-called Peer to Peer Lending
What is Peer to Peer Lending ?
Peer to Peer Lending, also known as Person to Person Lending or simply P2P Lending, is lending between individuals. It relieves people of the necessity of borrowing money from banks (which has got to be good!). Peer to peer lending allows the man on the street to act as banker and lend his money to other men and women on the street, with the same risks and rewards.
How does Person to Person Lending work?
If you are need a loan and think peer to peer lending may be a solution then you first need to submit a loan application. After this, possible lenders bid to provide you with the loan. The procedure is similar to an auction, the lender offering the lowest interest rate obtains the contract.
Peer to Peer Lending attempts to correct the inefficiencies of normal bank lending whilst at the same time allowing individuals with funds to lend, so as to obtain a better return than they would if they deposited their money with a bank and allowing borrowers to obtain a better interest rate. Basically, peer to peer loans cut out the middle man (the bank or lending institution) and reduce the spread between the rates offered for deposits and loans.
All parties involved benefit. Borrowers because they get a loan at a lower rate than at a bank. Lenders because they receive higher returns on their money. Returns of around 10% are not uncommon.
Which companies offer peer to peer lending?
I can’t recommend any peer to peer lenders personally as I have never used their services, but there are plenty of companies around on the Internet.
If you think you might like to lend some money, you can start lending with as little as $50 ! So in these troubled times it could be worth taking a closer look at.
Bear in mind also that Peer to Peer Lending is normally for people with reasonable to good credit ratings. If your credit rating is less than perfect you may wish to consider bad credit signature loans instead.
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