Review of Peer-To-Peer Lending

Everyone involved with groups like Slow Money, a good read!

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p2p

Peer-To-Peer lending is an alternative method of investing and borrowing.  The average investor is willing to lend on P2P platforms because the yields are attractive and there is potential for high returns.  Borrowers that want a loan provide their personal information to receive offers on the rate and loan term.  A background check takes place with a rating scale of the borrowers default risk.  The higher the interest rate the higher the borrowers risk. The average lending interest rate is close to 14%.  If investor(s) accept the loan they receive a portion of the borrower’s fixed monthly payments.  The approval process for a loan can take as little as 3 days and loans are given to borrowers with a credit score under 680.  The minimum credit score required is around 630.  Borrowers that use P2P lending need the extra money for debt consolidation loans, credit card payoffs, to start a…

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