Is Peer to Peer Lending the Right Option for Me?

One new form of business and personal lending that could not have existed prior to the internet, is peer to peer lending. 

Peer to peer loans are loans that are funded by other individuals. Obviously, person to person lending has been around from the start of commerce. 

Personal loans made to individuals and businesses are nothing new. However, these loans were made to family and friends as no sensible lender would extend a loan to a stranger. 

How to Peer to Peer Loans Work

Technology permits borrowers to work straight with other people who have the capital to lend. Borrower fill out lending applications at peer to peer lending facilitators.

The facilitators then aggregate deposits of those with the capital to lend. Finally, borrowers and lenders are matched through the facilitator based on the credit criteria chosen by the individuals who have opened accounts with the facilitator.

Is Peer to Peer Lending Right for Me?

Peer to peer loans can be a great option for business owners. Prior to getting a peer to peer loan, it is critical to know if peer to peer lending is legal in your state and to have a good idea if your credit score qualifies.

Then, once you determine if you can take out and qualify for a peer to peer loan, make sure you consider both the loan fee and interest rate before committing.

After considering all of these factors you can be confident in your decision of whether or not peer to peer lending is right for your business.

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