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Peer to Peer Lending & P2P Loans
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Peer to Peer Lending (P2P Lending) is a new way to borrow money online directly from people. People who want to lend money can loan those funds directly to people who need to borrow money. Since there are no banks involved, borrowers have the chance to receive interest rates that are more favorable than they might otherwise get from their traditional lending institution or credit card company. Lenders can potentially make more than they normally would by keeping their funds in a traditional bank account. Instead of letting their bank loan out the funds they have on deposit (only to keep the profit for itself), peer to peer lenders can receive higher rates of interest, directly from borrowers they choose. |
Peer to Peer Lending & Peer to Peer Loans Comparison Chart:
| P2P Lending Market Platforms: | Prosper | | Lending Club | | Loanio | |
| Peer to Peer (P2P) Loan Types: |
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| Personal Loans | • | • | • |
| Business Loans | • | ||
| Peer to Peer (P2P) Loan Amounts: | |||
| Personal Loan Amounts | $1,000 - $25,000 | $500 - $25,000 | ?? |
| Business Loan Amounts | $1,000 - $25,000 | n/a | n/a |
| Peer to Peer (P2P) Loan Rates & Terms: | |||
| Borrower Interest Rates | 7.70 - 36.00% | 7.12 - 17.86% | n/a |
| Borrower Loan Term | 3 Years | 3 Years | n/a |
| Peer to Peer (P2P) Loan Fees: | |||
| Loan Origination Fee (Added to Loan Amount) | 1.00 - 3.00% | 0.75 - 2.00% | n/a |
| Failed Payment Fees | $15 | $15 | n/a |
| Late Payment Fees | $15 or 5% of payment due | $15 or 5% of payment due | n/a |
| Early Payment Penalties | none | none | n/a |
| P2P Credit Qualifications: | |||
| Minimum Credit Score | 520 | 640 | n/a |
| Maximum Debt-to-Income Ratio | none | 30% | n/a |
| Peer to Peer (P2P) Lending Fees: | |||
| Payment Servicing Fee (Charged to Lenders) | 1.00% of payment | 1.00% of payment | n/a |
The information contained in this chart comes from the websites of the P2P Lending providers listed and is current as of 4/15/08. Rates & fees are variable, in some instances, and are not APR calculations. Please consult your Peer to Peer Loan provider for details.
