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A client has asked me to research personal loan options particularly with Peer to Peer Lending. P2P Lending – is the practice of lending money to individuals or businesses through online services that match lenders with borrowers. Does anyone have any experience or research they could share before I delve into this project. Looking particularly for fees, interest rates and pros and cons of using this option versus a traditional financial institution.
Diane,
Interesting question. My very first client’s late husband (an attorney and CPA) loaned money to individuals before there was internet lending! Unfortunately, when he died, she was stuck collecting the loans until they were paid off. People would drop off cash to their front door! It was a very stressful situation for on 80 year-old woman.I’m curious to know if other DMMs have experience with P2P Lending.
Thanks for raising the question.
NatalieI have quite a bit of experience with P2P lending, but it is as an investor rather than a borrower. There are a number of platforms for these loans, with the largest ones being Lending Club and Prosper. They extend loans that run either 3 or 5 years, and payments are automatically made by ACH debits from checking accounts of the borrowers. Their marketing to consumers is that they are able to process loans faster and at rates as good or better than traditional lenders, and with more flexibility in their due diligence. My understanding is that the borrower experience has been good. I would be happy to discuss further detail.
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