Wanna know how P2P lending is changing the industry of credit
You know, loan services, like prosper.com, embolden borrowers to post personal accounts of their financial situations — the kind of material that doesn’t show up on a credit report, like the fact that you accumulated your debt robbed school and are about to graduate into a good job — and then allows individuals to act as lenders by putting small sums together in a syndicate to make the loan. So if you want $10,000, you might get it from 100 people who share your interest over three years. Interest rates are also definitude between lenders and borrowers, and are much lower than the predatory high-risk rates charged by credit cards and payday loan centers (which can charge a whopping 521 percent API).
Lenders are embodied to diversify their loans, spreading out their investment in $100-or-up chunks that are spread among borrowers with different risk profiles. The sites report that their default rate is no worse than a credit-card company’s, even though they make loans at lower rates to high-risk individuals.