The concept of peer lending has been around for ages. Families or communities would pool money together to help out those who needed loans. Each family who contributed would take a turn at being the recipient of the money. Still alive today and known in different cultures by different names, this concept has found its way into the Internet and has become a growing alternative resource for people seeking loans.
Peer lending simply matches up individuals willing to loan money to people who want to borrow money. The borrower must qualify to receive money by individual standards set by the person who will be lending the money. On the Internet sites, the qualifications involve credit scores and debt to income ratio. But other factors can influence the lender, such as the reason for the loan.
According to Celent, a research firm, peer lending sources are expected to grow 800% over the next three years. Some good advice, if youâ€™re planning on using an Internet company â€“ do your homework. Peer lending sites profit from fees they charge borrowers and lenders. Peer lending creates a win / win situation for both borrower and lender.
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