Peer to peer lending is the newest way to borrow money at
low-interest rates. This can be a complete turnaround from traditional bank
loans. Millions of people across the world are avoiding bank loans carrying
high-interest rates. They are now going online to peer sites which are much
more to their liking. These sites are filled with people helping people -
borrowers and lenders - who are there to give a hand to fellow human beings.
Peer lending eliminates the bank "middleman" which results in much
better interest rates for all parties involved. Some lending sites need their
users to have FICO scores of at least 640. This means that not all loans are
approved by all sites. Finding one that fits your life circumstances is not all
that difficult to do if you just take a few moments to browse the web.
Most lending sites look at credit trends within the last few
years. Individuals with high credit ratings are the best risk, proving to have
less than a 5% default rate even during recessions. Lenders at some sites have
the opportunity to view a borrower's profile online and then decide for themselves
if it is worth the risk to lend him money. Smart lenders spread their
investment over several borrower profiles. It takes less than $50 to invest in
one loan making it possible to invest in several loans at one time. This
eliminates the possibility of one defaulted loan causing financial catastrophe
for one lender.
Peer to peer lending sites makes it simple to get going on
the road to success. All investors need to do is register at a lending site and
transfer a quantity of money into a personal account. Then, it takes only a few
moments to browse through profiles and decide where to allocate money. All
information is tracked such that it is easy to keep monitor any activity on
your investments. The investor can also reallocate money that has been paid
back. And notes can be sold whenever you want to get the invested cash back.
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