Person - To - Person Lending - Wikipedia The Free Encyclopedia

From person to person lending (and peer to peer lending, investing in peer to peer lending is known as the social and. Often referred to as loan P2P) financial transactions of a particular breed (mainly lending and borrowing , but other that can facilitate a number of complex transactions), financial institutions without the intermediation of an individual or a traditional "peer" is performed directly between. The majority of loans from person to person is a non-profit activities, to distinguish it from person to person, charity , charities, and from person to person crowdfunding of donor and recipient of the donation also creates a connection between the movement of non-profit.

[ edit ] Summary

Loans and friends, to feed the family and community members, but prior to the formal financial institutions in its modern form, peer to peer lending is a byproduct of Internet technology, particularly the Web 2. Check out also instant loans usa.0 .a niche market, driven by further economic crisis, the global platform for financing from person to person, which provides credit at the same time problems financial institutions financial traditional banks and other 2007-2010 in. promised to ^[1]

From person to person lending company to launch in the UK was the first British Zopa in February 2005. Was the first person in the United States to a personal loan company Prosper is February 2006, was started after one year. Canada was the first company that created funding for business finance P2P , September 2010. ^[2] For a complete list of loan companies are noteworthy from person to person, the loan company between individuals . For a map to visualize the different geographical locations of the business, please refer to the map that was created for Europe and North America .

In 2005, there were 1.18 billion outstanding peer to peer lending. In 2006, 2.69 billion dollars, and, in 2007, there were a total of 6. View cash loans instant.47 billion dollars. The estimated amount is $ 5.8 billion in 2010. ^[3]

Reasons range from borrowing from peer peer education ^[4] and mortgage, ^[5] and program funding to the wedding and vet bills, debt consolidation loans that the most popular. ^[6]

[ Edit Properties] to

Key features of the loan from person to person is dependent on the removal of the existing social networks.

[ edit ] removal of

Removal of the individuals ("peers"), the absence of a traditional financial institution as an intermediary between a term used to describe the removal of intermediaries in the supply chain, in the present context, a key driving force for this The decrease in cost of service. Our customers. Without technology to enable Internet has brought in several new crowdsourcing such as employment portals (connecting employees and employers), auction portal (connecting buyers and sellers), and peer to peer lending as a platform-based business model (the borrower and lender) please connect.

[ edit ] Dependence on social networks

Many loan companies take advantage of peer to peer, and existing communities, existing personal relationships with the idea that less likely to default to the borrower's own community members. Risks associated with the loan, through a form of social pressure, as occurs in some instances, cross-borrower (community) to be minimized or through one of the support. Acts as an intermediary between the family and friends to help companies calculate the loan repayment terms peer to peer, or their geographical location, educational and professional background, the similarity of ties in social networks and specific either by connecting borrowers and lenders on the basis of anonymity.

Variations between individuals and lending services for various models, have evolved based on different combinations of the following main parameter settings.

• Direct comparisons, indirect lending
• Compare unsecured loans secured
• Prior knowledge of borrowers and lenders
• Services

[ edit directly compared, indirect loan] to [ edit direct loans] to

In this model, the lender's credit rating is based on his / her particular lend money to borrowers, the risk of capital and profits for the lender is likely that the borrower defaults on loans. See no credit cash loans. Lenders have been leased to the people as one of only a small amount of money, has reduced this risk by investing a small amount of loan number. Please also see the direct loans .

[ Edit indirect loan] to

This model (also "pooled financing" known as), and a lender lends money to borrowers with a credit rating similar to some of the risk of capital and profits for the lender, The arrears in the pool. Therefore have been trivial in light of the payment in a timely manner most of the notes the influence of one of the default, which significantly reduces the risk of the interests of lenders and equity, or one to many to one in both may have been involved in many trust structures. This model is very similar to a traditional banking model, the lender can choose the individual borrower is not allowed. See also pooled investments .

[ Edit unsecured loans secured against] the [ Edit loans] to

In this model, the lender gives money to the borrower against the strength of the collateral provided by borrowers. For loans that are originated in the United States, it is common to file UCC - 1 form. Each state has a different form. Also, please see. Asset-based lending .

[ Edit unsecured loans] to

In this model, the lender is based on the borrower's credit rating, giving money to the borrower. Lenders will run the risk of capital and profits in case the borrower fails in part. This space has evolved into two variants. See also an unsecured loan .

[ edit friendly lenders and borrowers before] the [ edit inexperienced borrowers and lenders] to

This model (also, "lending market known as"), the borrower and the lender, or are previously unacquainted, do not have a previous personal loan agreement. System to find the opposite borrowers individual, to enable lenders in each loan borrower lender willing to provide low interest rates best "win" them through the process, such as auctions is connected. See quick loan online. Market process, but can include other intermediaries who package and resell the loans are sold to individuals and eventually pool their loans.

[ edit ] borrowers and lenders familiar

This model (and "friends and family loans known as"), the lenders, their existing personal, family, lend money to borrowers based on their relationship or business. Model to formalize such a process and forgoes the auction, dedicated to servicing private loans. View same day pay day loan. Lenders will help borrowers in order to reduce the risk, you can charge less than the market rate. Loans, home, personal needs, schools can do to buy travel and other needs.

Lending community is a special case of this model in microfinance has been made to a particular individual loans, loan agreement, the responsibility for repayment of the loan directly to the borrower's social group ("cosigning" like) is responsible for failure to repay the obligation by one of its members being structured to hold either the or indirect, and social group entirely by it, so reduced access to credit at least, the future results, such as future interest rates, you may face.

[ edit ] Services provided [ edit ] Loan Origination

Services provided, calculate the interest rate and repayment terms and disbursing funds, and matching borrowers to lenders included. See also the origination of the loan .

[ edit ] Servicing

Services to be provided to establish a formal loan payment schedule by creating a written document to ensure timely payment and collection of funds from one party to include transfer to another. See also the Loan Servicing .

[ edit legal regulations] to

In most countries, is considered illegal soliciting investments from the public crowdsourcing people to consider the measures that are required to contribute money in exchange for potential profit based on the work of others that security .

Dealing with financial securities are connected to issues of ownership - Loans (notes) ownership and how (which owns that is transferred between the originator of the loan financing from person to person If the loan company from person to person) and individual lender (s). Check out also person loans. ^{[7] [8]} This question, peer to peer lending company if you do not simply connecting lenders and borrowers can occur, especially after they've borrowed money from its users, lend it again. You maybe interested in money lenders online. Such activity is interpreted as a license for the sale of securities brokers and dealers, registered investment contract between people and processes that are required by law. Check out also bad loan personal unsecured. Licensing and registration are available from the following securities regulatory authorities Securities and Exchange Commission in the United States, the Ontario Securities Commission , Ontario, Canada, Finance Autorit des marches in France and Quebec, Canada, or the Financial Services Authority in the UK

The emergence of the subprime mortgage lending companies and multiple conflicting uses a misleading consumers about unscrupulous lenders or lending conditions, a minimum of risk control agencies to eliminate high-risk loans to borrowers seeking additional legislative measures and capital standards to be checked. ^[9]

[ edit strengths and criticism] to

One of the main advantages of personal loans for borrowers between the rates of traditional bank (in most cases, that can offer better rates below 10% ^[6]). Benefits for the lender is higher than the return obtained from a savings account or other investments. ^[10]. Without both of these benefits is the result of a lack of high overhead of traditional financial institutions to take place in a number of employees and costs. You maybe interested in no fax payday loan. Lack of administrative procedures in financing from person to person, fast moving funding applications and loans, both lenders and borrowers take less time and money that can be accessed, there is an added advantage.

Company and its customer base from person to person lending, maintaining high quality product information Web site service to customers, and developing, however, arbitration and administrative costs related to marketing costs and grow customer service continued to rise significantly in the competition, such as regulatory compliance and more complex. It fades out from the hollow, causing many of the advantages of the original, they are very new intermediaries such as banks are distinguished from the original turns on between people in the company. Such a process is known as the reintroduction of an intermediary Reintermediation .

Or who lack the credit standing of their past in order to finance from person to person, collect a borrower does not qualify for traditional bank loans. These unfortunate circumstances of the borrower, however, very high interest rate loans verges sufficiently known result for the issuer's predatory loan or a loan sharking . See bad bankruptcy credit mortgage.

At the same time, it is often an indicator of future performance and low credit score past behavior correlates with the likelihood of failure is high, as an intermediary between people, many bound for a certain credit score are beginning to reject the borrower under the.

One of the attractive features of the individual against individual loans for investors, it initially seemed to be a low default rate, for example, Prosper's default rate is only 2.7 percent in 2007 quoted to be one. ^[10]

The actual default rate of loans originated in 2007, Prospera is actually higher than expected. (Not, for example, after having made 30 loans "default" as - rather than simply "default rate" from - the loss of principal is given default of repayment cycles, aggregate yield is better to talk about it 36 is dependent on proper timing), the effect of the payment, by default, after you pay the loan is returned in a few different ways.

Aggregate return for the vintage 2007 Prosper (Prosper real credit grade, such as between all of the market based on data LendStats.com, as measured by) 8.10 per cent 2009 vintage, vintage 2008 ( 2.44)%, because of (6.44) was% - independent forecasts for 2010 vintage and are of an aggregate return of 9.87 percent. ^[11]

[ edit ] See also please. [ edit References to [ edit ] External links

• Peer to Peer Banking - CNN Money: Business 2.0 magazine, August 01, 2005
• Credit loan online services - ABC News, November 23, 2005
• Avoiding the Pitfalls of Family Borrowing - National Public Radio, to June 10, 2006
• Credit crunch, lending to each other - the CBS Evening News, March 21, 2008
• Hey, buddy, you can save $ 10,000! - Time Magazine, February 29, 2008
• In social lending, the replacement ticket ABC News, the October 28, 2008 -
• Borrowed from Bob, forget Citibank - Harvard Business Review, January 1, 2009
• Money Web - American Way Magazine, July 01, 2008
• Peer to Peer lending is, refused to die - Wall Street Journal, January 22, 2009 to
• Social Entrepreneurship in India - India Economic Times, February 20, 2009