How To Use Peer To Peer Personal Loans
There is an old saying: "There is nothing new under the sun", and this can be applied to peer to peer personal loans. In the old days, banks and other lending institutions did not even exist. People who needed funds could usually find the person in the area who had excess funds to lend out. This was the basics of person to person, or peer to peer loan. As our society and its institutions became more formalized, specific businesses were established for the main purpose of lending funds in exchange for the payment of interest. Frequently, these businesses did not use their own funds, but took deposits from people in the area who desired to earn some return on their excess cash. The financial institution acted as an "intermediary", taking money from depositors and paying them interest at a certain rate, then lending that money to borrowers at a higher rate. The lending institutions made money paying interest on deposits at a lower rate than the interest they earned on loan.
But many factors in the lending business have encouraged people to revisit the old concept of peer to peer personal loans, with the result that both lender and borrower have an advantage. Eliminating this middle man, or intermediary, is called disintermediation. Today's peer to peer personal loans are not limited to those in the same locale, since they can be administered on an online marketplace, where those in need of funds can be matched with those who are willing to lend. Often these marketplaces are set up as auction sites, where the site assumes the responsibility of matching, credit checking and processing. The site connects the lenders and the borrowers in an auction process, similar to Ebay for goods, where the lenders compete with each other to provide the lowest rate to borrowers, and borrowers compete with one another to obtain the best rate for their personal loans. When the banks are taken out of the picture, so is their profit, and that difference is split into savings for the borrower, and increased profit for the lender.
Another important advantage of peer to peer personal loans is the way in which the risk of these loans is managed. Frequently, personal loans are parcelled so that a lender gives his money to a number of different borrowers and, conversely, the borrower is receiving his loan from many different lenders. Imagine that you, as a borrower, wanted to get a personal loan of $1,000 for an engagement ring. The peer to peer lending site might have many lenders who are willing to invest $1,000 in a loan. A lender might only lend $100 to this young man's romantic endeavor. But he can easily locate another borrower, someone who is using the funds for loan consolidation, and lend him another $100, then find another borrower and lend him money for home repairs, etc, until he has lent his total a$1,000 investment.
His $1,000 investment is, in this manner, going to be spread out over ten different risks, so that the overall risk is much lower than it would otherwise have been. The converse advantage for the borrowers is that they have many more lenders bidding for their personal loan business.
This "old but new" solution of peer to peer personal loans turns out to be a win-win situation for all the parties involved.
Get a loan today with investment opportunities or maybe a loan for personal loans
Tags: different lenders, Unsecured debt, Loans, old days, overall risk, nothing new under the sunFiled under Personal Loans by 
Comments on How To Use Peer To Peer Personal Loans
People ask me? why I hate Aboriginals, it not your fucking land…
Here are the links to those three Telegraph articles on Zopa today: http://bit.ly/epej08 and
Not a glowing report on #p2plending, but author brings up a good point. More contact between lenders & borrowers?
A few years ago I sold my flat and decided to invest part of the proceeds in a Halifax Savings Bond. I wrote out a £50,000 cheque from my Bank of Scotland (BoS) account into which my solicitor had deposited the money. Halifax and BoS had recently merged. Nevertheless, I had to present myself at a Halifax branch with id for an interview to establish that I was neither a terrorist nor a criminal laundering money. When I proved that my new address was not Tora Bora Caves, Afghanistan and stated that I liked my £20 notes well starched with two vertical creases, the cashier accepted I was probably insane but solvent and attempted to sell me more savings products.
I agree with your position on savings but having money in accounts even paying 0.5% interest is better than not having ready money on deposit. Without wishing to influence anyone, I am investigating the pros and cons of peer-to-peer lending sites like zopa for a small proportion of my portfolio.
All these regulations are in place to maximize taxation of the ordinary citizen. Criminals and terrorists will always find ways to circumvent them.
» New Rules Make Comparing Personal Loans Simpler and More Transparent: The Independent News website reported that there are still un…
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My view:
The concept of lending money is a mutually beneficial arrangement. The lender (usually a bank) is making money off of the borrower. They lent money (which is oftentimes just a virtual transfer of a dollar figure, as opposed to cold hard cash), and receive interest payments. They LOVE getting interest payments.
So the lender benefits.
The borrower benefits because they needed cash, and someone was able to provide it (at a fee – the interest).
The key is to determine the rate which both parties find appropriate. This is based on risk and return – a riskier borrower may not pay back what they owe, or even the interest payments. Thus, a higher interest rate is charged, to make sure they're serious. Check out CommunityLend for some rates on Canadian peer-to-peer lending (6-29%). It's all based on how pay-back-worthy a borrower is.
Note, though, that we can't join because none of us would qualify as Accredited Investors. In the US we could, because they're less regulated…
ANYWAYS…I believe that, as long as the terms of the lending agreement are being met (interest payments made), it is NOT unethical to give money elsewhere.
That being said, here's a related story:
The protagonist hit rock bottom in the book I mentioned at our last meeting: The Richest Man in Babylon. He was in debt and had but a miniscule income. The arrangement he made (fully disclosing to his creditors) was that he was going to save 10% of his income and pay back debts using 20% of his income. He, therefore, lived off of 70% of his actual income. He did this NO MATTER WHAT. In this situation, the creditors didn't care as much about the interest as they just wanted their stinkin' money back!!!
I highly encourage reading this book – it was a short, nice read. I could lend it out, even!
That's it…
idk i have? like 20 bucks right now enough to buy extremely cheap shoes
but my parents buy me watever i want (im 17 btw)
Peer to Peer lending is a convenient method of lending money by one person to another without the intervention of…
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Hi sweety!!! I was going through your blog and found this Home Sweet Home and read it…By gee's..it brought tears to my eyes. I just wish we could go back to these good old days hey? At least will always have the memories.Yes B still has grandpa's fiddle and put away in a good place.We talked to him a couple of weeks ago and he's holding it as a memory of his godfather. Love you and love to hear about old days.
That's the problem with one-word titles: they're obvious, so they've probably been used, unless they are a made-up word or compound. You need multiple components for a better chance of avoiding a cliché.
What you might want to do is stick to the patterns "The ___ of the ___" or "The ____ ____" and make one of the words a unique compound word, or split it into a two-word phrase. Something like "The Everunfolding Saga" or "The Champion of the Emergent Return". The latter suggests "the eternal return", which is a very old concept that sort of fits your intent.
Person to person lending software service: LendingKarma is an online service that helps people lend money to the…
RT Take calculated risks. That is quite different from being rash. – George S. Patton
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