In the last 12 months, the amount of credit that banks have available to them to loan to customers has drop significantly, as a result 65% of banks nation-wide have tightened up their lending standards making it hard for consumers to get loans for major purchases and to refinance debt.
As a result, peer-to-peer lending sites, such as Prosper, Zopa and Lending Club have gained significant popularity during the recession. Some estimates state that peer-to-peer lending will account for over $100 million during 2009 and that number will increase to over $500 million by 2012.
P2P Lending Sites such as Lending Club.com make it much easier than applying for a traditional personal loan through a bank to get credit. Anyone with a credit score of 713 or higher can register on Lending Club.com and apply for a loan. Their credit report and employment is verified and then individual investors can decide whether or not they want to loan the individual money.
Currently, the interest rates that borrowers are paying on the P2P lending site, Lending Club.com, range from 7.4% to 20.1% depending on the borrower’s credits core. Typically the loan terms on Lending Club, Prosper and other sites are for 3 years and the interest rate is fixed for the life of the loan.
For more information about Lending Club,visit www.lendingclub.com
For more information about Prosper, visit www.prosper.com
For more information about Zopa, visit www.us.zopa.com
