Peer-to-peer lending sites such as Prosper Marketplace and Lending Club have received much of the spotlight when it comes to innovative financial products during the last couple of years, but there’s another type of peer-to-peer lending that’s much less reported on.
Previously, Virgin Money tried to take a run with the model of acting as a servicing agent when making loans to friends and family members. Virgin Money has all but exited its US business, but now ZimpleMoney is trying to make a go of the same business model. Here’s our ZimpleMoney Review.
The primary difference between ZimpleMoney and Lending Club or Prosper Marketplace is that with ZimpleMoney, you are taking loans from people that you already know rather than lenders across the country hoping to make money off of your loan as an investment. ZimpleMoney hopes to add some level of formality to the handshake loans that friends and family members make with another on a regular basis.
We’re not sure if ZimpleMoney’s implementation of this business model is the most innovative out there, but it’s something that’s needed. Most loans to friends and family members are never paid back and often result in a strained or damaged relationship. Having some level of formality to that with terms that are spelled out and a loan servicer collecting payments is certainly a good place to start if you’re going to borrow money from friends and family.
Here’s how ZimpleMoney describes themselves on their website, “ZimpleMoney takes the headache out of tracking and monitoring private financial agreements- loan documents, payment processing, direct deposits, reminder emails, as well as gift and tax reporting—all in a social network so you can easily keep everyone up to date and informed. “
Here are the features that ZimpleMoney advertises:
- Convenient direct deposits to your bank account
- Connect with friends and family to borrow or lend money
- Easily track private and personal financial agreements
- Safely and securely have payments deposited into your account without the risk of mail box theft or worse – identity theft
- Automatically email bills and payment reminders
- Record payments and use to create gift and tax reports
- Low cost way to automate billing and collection of rental payments and settlements
ZimpleMoney will work well if you have friends or family members that have already agreed to lend you money. If you don’t have anyone in your family that will lend to you, it’s probably best to stick with getting money from Lending Club or Prosper Marketplace.