Finding the Best Peer to Peer Lending Sites

  Finding the Best Peer to Peer Lending Sites Ever since the credit crisis of 2008, many lenders have grown more reluctant when assessing criteria requirements for potential …

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Finding the Best Peer to Peer Lending Sites

Ever since the credit crisis of 2008, many lenders have grown more reluctant when assessing criteria requirements for potential investors.  This is why many people are looking for ways to compare the best Peer to Peer lending sites for investors.  Luckily, there are several research tools that are available for investors in determining which route is best to take.  Here, we will look at some of the factors involved when assessing these types of personal or business lending opportunities.

Understanding Lending Formats

At its core, Peer to Peer lending outlets allow borrowers to find lending resources outside of the traditional banking activities.  This means that smaller investors will be taking on these loans, and the potential risk involved when borrowers fail to make their regularly scheduled payments.  But there are also some handsome rewards that can be garnered by investors that implemented the best loan selection strategies for their individual portfolio.

Early on, most investors are focused almost exclusively on net returns.  This is obviously an important factor in assessing total performance but there are other factors that should be considered, as well.  As the research on Investment Zen shows us, factors like the overall Interest Rate and the Default Rate are also critical components when making your assessments.  

Making Important Comparisons

When we are looking at the major players in the Peer to Peer lending space, the obvious choices are Prosper, Upstart, and Lending Club.  Each of these companies has its own set of criteria in terms of which applicants are going to be considered as viable for loans.  This will turn out to be critical when you are choosing which investment opportunities are likely to turn out profitably — and which will not.  

In many cases, Peer to Peer lending experts will suggest that the best investments come from situations where the company is able to accurately forecast whether or not your borrower is likely to repay all of the loan payments in a timely manner.  Missed payments can create a number of difficult problems (in a variety of areas), so this is a critical area that should be assessed before any investments are made in these areas.   

Going forward, we are likely to see many different types of lending options that are being made available to potential borrowers.  Peer to Peer lending is one of the most innovative options in these areas, and there are significant rewards to be grasped by investors that have made the proper comparisons.

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