Peer to peer (P2P) lending sites and programs, such as one offered by Prosper, allows people to both lend money out to others and allows individuals who need funds to borrow the money they by getting a loan directly from others. Peer to Peer sites and Prosper give both borrowers and lenders the opportunity to get more favorable interest rates, including on debt consolidation, student loans, financing to pay a specified type of bill, and maybe even a loan to buy an automobile, and more.
The largest peer-to-peer lending marketplace is offered by Prosper, and partly due to their size, many people say that they do the best job in connecting potential borrowers to people willing to provide loans. They have an immense amount of knowledge and experience they bring to the industry. Their service eliminates the need for potential borrowers to go through a bank for a loan and they may be able to offer lower interest rates to consumers than banks can.
How it works is that lenders will bid on borrowers requests for loans by offering the borrower competitive interest rates. In total, Prospers membership is more than 700,000 people from across the U.S. Over $200 million in loans have been funded since the company was founded in 2006. Loans from Prosper can go a long way towards helping people consolidate credit card debt, pay off medical bills, purchase a vehicle, or even get a loan to help pay for college costs or student loans. Prosper offers consumers many excellent lending options with great, low interest rates.
While every P2P site has its own way of calculating the lending interest rate or other fees, and the rate will also depend on the number of people offering a loan in the marketplace, the fact is that in general borrowers with decent credit scores will typically get a better interest rate than they would from a bank loan. This can lead to significant savings over time.
While the interest rate you pay will vary, and it depends on your credit score and employment status, the number of bidders on Prosper, your need, and other factors, the interest rate you may receive on a debt consolidation loan can range from about 7% to over 20%.
A seven percent interest rate should be better than any existing rates on any credit cards you have. This therefore makes it an easy decision to consolidate with that source of financing. While a 20% plus rate may not be that great, sadly many Americans are currently paying an even higher rate than that on their credit cards. So if that is your situation, then even a 20% interest rate can help you and it can be something to consider.
Peer to peer lending sites and Prosper are also a great option for families who cannot secure college grants or funds through more traditional lenders. With the escalating debts being taken on by many students, any other possible source of inexpensive funds should be strongly considered. Education loans have become a special niche within the P2P industry, and Prosper is meeting that need.
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