Prosper Peer Loans
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Other sites like Zopa, based in the UK, completely withdrew from the US market. The loans already issued were still honored and potential investors were turned away with little information.Today, Lending Club seems to be the only one back up and running. They have filled all the necessary paperwork with the SEC and have been granted permission to once again issue peer to peer loans. Other sites like Proper, are still going through the process and are still on hold.The SEC filing seems to be an almost bump in the road for the industry. Lending Club's ability to issue loans again opens the door for others sites looking to get back to business as usual. The current credit crunch has made peer to peer lending even more attractive for those struggling to get a loan. Borrowing applications continue to stream in for those issuing loans. Today sites like Lending Club have over 100 current in funding loans and total $25,000,000 already lent. If you were thinking of investing in peer to peer loans and were scared away by the commitments, Lending Club's trading platform has just added some liquidity.Investors in peer to peer loans like it for several reasons. One is they could be helping someone. The borrower might need funding to start a business or pay for school. Second is the often the nice return investors see on their money, with many loans earning above 10%.Certain investors liked the idea, but stayed away for a couple different reasons. One major reason is once you entered into a peer to peer loan you were locked in for the duration of the loan. With most loans being three years, peer to peer loans were not considered a liquid asset. If times changed and you needed access to money, your peer to peer loan was not the place to look.Today, this might be different and has to do with the major changes to the industry in the last year. The SEC has stepped in and stated that issuing peer to peer loans without proper registration is illegal. This effectively shut down the industry and has done so for some time. Banks that want to open back up have to fill out the appropriate paper work with the SEC before issuing any more peer to peer loans. For those banks that do register, their peer to peer loans become securities and are tradable.Today, Lending Club is one of the first to complete the registration and back open issuing loans. They have also added a trading section to their website. There, visitors will find it is being managed by Folio a member of Financial Industry Regulatory Authority (FINRA). This is a huge securities regulation firm that clients include the NASDAQ and ASE.This addition has resolved the problem of liquidity. If you want to get out of a loan because you need the money, you can attempt to sell it on Lending Club's trading platform. Furthermore, if you are looking to invest in a peer to peer loan, but only for a year or so, you can buy a loan listed on this exchange. For traders, Lending Club provides the information about the loan as well as the current credit standing of the borrower. |
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Author Resource:-
Current User of Prosper.com - Saved My llife
peer to peer lending
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By :
Harris Patel
Submitted
2011-07-21 20:49:55 |
Article From Article Mayhem
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