For borrowers who are looking to bypass traditional lending rules, peer to peer lending may be an option. One of the big peer to peer lending sites is Prosper.com. this service facilitates peer to peer lending allowing borrowers to procure loans from those willing to invest money in exchange for a relatively high return.
Finding Prosper Loans
Consumers who have a good credit standing and high credit score can find the lending process at Prosper easy to understand with the hassles of working with a traditional lender. The borrower can request a loan for any reason they desire but most applicants are looking to complete home projects, finance education, or secure an auto loan.
Applying for peer to peer loan through Prosper can be completed online. Those applying for loans can provide as detailed information about their loan request as they wish. Investors can review loan requests and make a personal decision as to whether or not they want to finance the loan. Applicant information can be an important part of the decision-making process on the part of the lenders.
Prosper Loan Data
The loans at Prosper range between $2000 and $25,000. Borrowers can select the loan amount they are in need of and then complete the online application that details the purpose of the loan. Credit scores of the applicant are reviewed by Prosper and assigned a company grade the lenders will see in order to make more informed investing decisions.
Once an investor reviews the applicant’s information and determines their own funding criteria approving the loan, borrowers then will receive a direct deposit of funds. Repayment terms are then established that include regularly monthly payments in fixed amounts. These repayments are then distributed back to the investor. All loans through Prosper are considered unsecured loans. They are available in terms of one, three and five years.
Prepaying loans before the terms have ended does not carry a penalty. For loans that are paid late or missed entirely, there are fees and penalties assessed. Each loan also involves a closing fee which will vary in amount by the total loan value. Closing fees on Prosper loans are deducted from the initial funds before they are deposited into the borrower’s account.
Typically it is the investor that incurs most of the risk in peer to peer lending should the borrower default on payments. Investors will not be able to benefit from the high returns often offered through the service. Overall, Prosper loans have been shown to be beneficial to both those needing money and those who are looking to diversify investment portfolios.