Peer-to-peer lending, allows individuals looking for credit to bypass traditional lending institutions and create listings online detailing how much money they need to borrow, the purpose of the loan and how much interest they are willing to pay. Also known as person-to-person lending, this source of credit is becoming increasingly common as more people find it difficult to meet the new stringent requirements for loans, according to an article in the Dallas Morning News.
“What we’ve seen since the credit crunch hit is that lenders are moving to more creditworthy borrowers,” said Chris Larsen, chief executive of Prosper, the largest people-to-people lending marketplace. “They actually have more and more customers to pick from and more customers who have been cut off by traditional lenders across the board.”
According to research, peer-to-peer loans are projected to reach $5.8 billion in the U.S. by 2010. If you want to consider peer-to-peer lending make sure that the loans you’re requesting are for practical things such as, business equipment, repairs to the home or school supplies etc. It may be very difficult to convince individuals to loan money for luxuries such as a new car, clothes or vacations.