It's becoming increasingly difficult to get a loan in these economic times. Even for people with excellent credit ratings, banks and financial institutions will not lend money to them. Social lending is a growing trend that allows consumers to borrow money from others. You can also learn to invest from home online for peer-to-peer lending.
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How peer to peer lending works?
Each new member can register to become either a lender or borrower in online social lending clubs. Lenders are interested in social lending as an investment method.
Some sites let lenders choose their interest rates for loans while others require borrowers with low credit ratings to pay high interest rates. Lenders can make a good profit provided borrowers repay their loans.
Peer-to-peer lending sites are a popular way for borrowers to get loans. However, the annual interest rates at these social lending clubs can be very high, up to 35% or more for those with poor credit ratings.
Peer-to-peer lending is a great way to obtain a short-term loan if your credit score is good. Social lending sites have helped to finance nearly half a million dollars worth of loans over the last few years according to Slate Magazine. Their popularity is growing.
Lending clubs fill a niche market.
Lending clubs are relatively new. They were started by the micro-lending movement and fueled by current economic difficulties. Lenders were to be able to lend money to people and causes in need all over the globe, not just as an investment.