One of the big news that everyone keeps on talking about is the shortage of credit being lent during this time of recession. Despite numerous attempts by the government to pump money into institutional lenders, credit remains tight.
But while the government and major banks are trying to maintain the status quo on the loan, P2P companies like Crowdfunding-platforms are quietly getting on traditional lending and providing much-needed credit for cash strapped consumers.
This movement, called the loan to people, is all about matching people who have money to invest with those who want to borrow money and draw up an agreement for mutual benefit. Often both parties will find that the prices are much nicer than what they can find at any bank.
P2P lending works as an investment vehicle for loans are considered short-term, usually no more than three years. And no P2P lending institutions offer home loans, because it will create a class entirely different loans that might not be beneficial to the members.
Loans funded I have seen and have ranged from a debt consolidation loan for home renovation credit, and even including the cost of tuition. In general, it is a loan that banks generally will not touch because of the higher risk factor; but in exchange for the risk factors, you can lock in a higher rate of return.