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How Does Peer to Peer Lending Work?

HOW DOES PEER-TO-PEER LENDING WORK? THE FUNDING PROCESS "I NEED MONEY FOR..." A borrower applies for a loan, requesting money for anything from credit card consolidation to a new car to medical expenses. UP TO $35,000 Upon approval, the lending platform lists the loan criteria, and allows investors to research the loan to make a decision. $85 $125 $25 $85 $25 $25 $30 $1,000 3 When investors find the loan criteria or purpose appealing, they can choose to fund a part of the loan. The loan originates when the funding amount is reached. THE REPAYMENT PROCESS Borrower repays the agreed upon principal and interest to the lending platform through fixed payments each month. PRINCIPAL INTEREST The lending platform divides the payments for distribution to the loan's investors. +$ +$ Investors receive their investment + return over time as the loan is repaid. THE 66 Though still a microscopic part of the estimated $11 trillion consumer FACTS lending market, P2P is going to matter in a big way sooner than you think. I3 -American Banker Magazine 2006 4 BILION 177% THE YEAR THE FIRST P2P DOLLARS IN LOANS INDUSTRY GROWTH LOAN WAS ISSUED FUNDED SINCE 2006 BETWEEN 2012 AND 2013 PERSONAL LOAN TOTAL MARKET $2.8 TRILLION CURRENT P2P LOAN MARKET „$4 BILLION Source: Prosper 701 $85K $12K AVERAGE FICO CREDIT AVERAGE INCOME AVERAGE LOAN SIZE** SCORE OF P2P (AS REPORTED BY BORROWERS)* BORROWERS* 16 The emergence in recent years of the innovative alternative finance sector, which includes peer-to-peer lending platforms, has provided much needed liquidity and an opportunity for both savers and borrowers to obtain credit at extremely competitive rates. I9 -Economic Voice *Prosper Data as of Sept. 30 2013 **Nickel Steamroller data as of Feb. 2014 PROSPER wwW.PROSPER.COM

How Does Peer to Peer Lending Work?

shared by Prosper on Mar 18
How Peer to Peer lending works from both lender and borrower perspectives.






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