Old School Personal Loans or New School "P2P Personal Loans"?

Personal Loans are individual unsecured extensions of credit, traditionally by a bank or other lending institution, to an individual person. P2P lending networks, such as those covered on Peer-Lend, allow individuals to borrow and lend with one another, online, without the necessity of a "traditional" financial institution (and, therefore, lower transaction fees, due to lowered overhead). Personal loans extended from many users ("lenders") to one end-user ("borrower") are P2P personal loans, P2P representing the fact that the loans were made through a marketplace or financial networking hub.

Directly providing personal loans, without a bank to use for customer acquisition, requires a transaction platform of some type to sit in the middle of the transaction, one which allows platform/market participants to interact with one another for the purposes of transacting business. An initial test market for this type of online transaction community might be based upon a military model, for the extension of military personal loans, an example that gives us a close-knit and pre-structured "community", with clear, pre-established channels of communication (as well as some level of financial/career security with only a single employer, plus some fairly well defined pay grades / pay scales, which give a good idea of each borrower's base income), with which to begin.

Debt Consolidation with P2P Personal Loans via P2P Lending Markets

P2P personal loans offer a convenient (and more efficient, price-wise) alternative to borrowers, as compared to a traditional bank personal loan or revolving credit account from a provider such as VISA or MasterCard. Balance transfers are tempting to use as a debt consolidation loan, but often come with time limits or unfavorable terms (such as upfront percentage fees and the like), whereas fixed term, fully amortizing loans offer a more stable solution to paying down debt. Distributed allocation of capital over many borrowers (at small dollar amounts), for lenders, can reduce risk exposure and ensures that, if a few borrowers fail to pay, lenders will still likely see positive returns.

Types of Personal Loans (Information Resources)

• Personal Loan Rates (rates depend on borrower credit scores)
• Small Business Loans (available to owners of small businesses)
• Unsecured Personal Loans (all loans are unsecured, w/no collateral requirements)
• Debt Consolidation Loans (for consolidation of credit card debts)