What is Peer-to-Peer Lending and What is it for?
In short, peer-to-peer lending is an alternative to banks and is a private form of funding. It is most commonly used for secured loans (eg vehicle or equipment) or unsecured loans (eg debt consolidation, holiday/travel, home improvements).
Investors provide funding and credit-worthy borrowers apply to use those funds via an on-line platform. An interest rate and establishment fees is applied based on the borrowers credit score and rating. Generally, borrowers with a good credit history will attract a competitive rate which may be cheaper than traditional banks.