Borrowers now turn to peer-to-peer lending like Lending Club and Prosper.com for a more affordable interest for their unsecured loan than the rates that banks and credit unions offer. Borrowers can have the opportunity to get a fixed rate loan at a cheaper interest rate for just 6% which these companies will provide them.
These rates are really what make borrowers decide to just refinance their personal loan into a peer-to-peer loan. The question probably on your mind now is how Prosper and Lending Club provide these loans with really low interest rates. The primary answer is because the finances are from individual investors. When a person borrows from the bank, the bank loans them with money lent by a saver. Typically a saver gets 3% rate of return on a CD from a bank which the bank loans from 7% to 30% which depends on the type of loan, the difference goes toward their pockets.
The point of this peer-to-peer lending is to allow savers to lend their money directly to borrowers without having to deal with a middle man. This makes borrowers and savers be on equal footing, they both get much better rates on their money.
Applying for a peer-to-peer loan is painless. An application process is offered on companies' websites, like Proper and Lending Club. You'll be informed what interest rate you can borrow money at immediately. If you opt to take up the loan offer, just finalize your application and your loan listing is going to be available for the investors on the peer-to-peer lending marketplace. In up to two weeks' time, your loan will get funded from investors. Once you get the sufficient funds, your account will receive the amount of the funds of your loan. And then after a month, payment should be made automatically. The lending companies such as Lending Club and Prosper are the ones responsible for all the paper work making repayments very easy for you.
As a lender, the process to start investing in peer-to-peer loans has also never been easier. Unfortunately, there are a few states whose regulatory environments aren't compatible with investing in peer-to-peer loans, so make sure that you could be a lender before signing up.
The account creation process takes all of 15 minutes. Once you have your account setup, you simply transfer funds to your investor's account. After the next days or so, you should begin investing in individual notes on the peer-to-peer lending marketplace you signed up in. You will receive your share of the repayments provided by the borrower automatically as the funds are transferred into the investors account. At that time, you can reinvest the funds or take them out of your account.
These rates are really what make borrowers decide to just refinance their personal loan into a peer-to-peer loan. The question probably on your mind now is how Prosper and Lending Club provide these loans with really low interest rates. The primary answer is because the finances are from individual investors. When a person borrows from the bank, the bank loans them with money lent by a saver. Typically a saver gets 3% rate of return on a CD from a bank which the bank loans from 7% to 30% which depends on the type of loan, the difference goes toward their pockets.
The point of this peer-to-peer lending is to allow savers to lend their money directly to borrowers without having to deal with a middle man. This makes borrowers and savers be on equal footing, they both get much better rates on their money.
Applying for a peer-to-peer loan is painless. An application process is offered on companies' websites, like Proper and Lending Club. You'll be informed what interest rate you can borrow money at immediately. If you opt to take up the loan offer, just finalize your application and your loan listing is going to be available for the investors on the peer-to-peer lending marketplace. In up to two weeks' time, your loan will get funded from investors. Once you get the sufficient funds, your account will receive the amount of the funds of your loan. And then after a month, payment should be made automatically. The lending companies such as Lending Club and Prosper are the ones responsible for all the paper work making repayments very easy for you.
As a lender, the process to start investing in peer-to-peer loans has also never been easier. Unfortunately, there are a few states whose regulatory environments aren't compatible with investing in peer-to-peer loans, so make sure that you could be a lender before signing up.
The account creation process takes all of 15 minutes. Once you have your account setup, you simply transfer funds to your investor's account. After the next days or so, you should begin investing in individual notes on the peer-to-peer lending marketplace you signed up in. You will receive your share of the repayments provided by the borrower automatically as the funds are transferred into the investors account. At that time, you can reinvest the funds or take them out of your account.
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