Monthly Archives: June 2017

Prosper Loans – Peer-To-Peer Lending Creates Opportunity

Many people assume there is only one source of borrowing. This source would, of course, be a traditional bank. While banks truly are a major source of lending, there are other opportunities for borrowing. One such method would be peer-to-peer lending. Among the common peer-to-peer lenders, Prosper remains an increasing popular provider.

Prosper Loans (Prosper.com) is a company that also does offer something unique to the financial market. It provides a means in which investors can a nontraditional and potentially profitable vehicle for their money. How so? Investors become lenders and reap the interest on the financing they provide.

The numbers tell the tale. There are over 1.1 million members and they have borrowed $264 million in funds. Such figures clearly show that this is a well established and serious lender. How does the program designed by Prosper work? The answer to this is found in the answer to what exactly peer-to-peer lending entails.

Basically, the process eliminates the traditional lending institution by connecting borrowers with those that are looking for viable vehicles in which to invest their money. New and innovative investment vehicles will always be popular which is why this company is raising eyebrows in financial circles.

The actual borrowing/lending/investing process is a rather streamlined one. A borrower merely needs to determine a loan amount along with a stated purpose for the loan. Immediately thereafter, the borrower will post a classified ad promoting a loan listing. Those interested in investing via funding loans will examine the classified listing.

Investors are not under any obligation to cover any loan. However, if the investor sees a loan listing that meets his or her risk level, the investor may wish to fund such a loan. Again, there is no obligation for the lender to accept a loan offer so no one is locked into funding weak loan offers.

As soon as a loan is approved, the borrower will make repayments in the same manner they would to any other lending source. They will make fixed monthly payments which will go to cover the loan and the interest.

The money that is paid back will cover both the investor’s actual investment although a portion of the payments will go to Prosper.com. This should be considered a given because the service does have to make money in order for it to remain solvent. That is just basic common business sense. This is where certain misconceptions arise where the service is dubbed fraudulent. Accepting fees for providing a lending and investing service is perfectly understandable. The key here is that the service does what is needed to do to provide all parties with a viable means of seeing both their needs met. Accepting a nominal fee in order to provide such a service is logical.

Prosper.com does offer a unique peer-to-peer lending and investing service which can help all parties involved. Many are seeking a viable means of acquiring lending when other forms of lending have been cut off. The same can be said that there is a need for effective investment vehicles as well.

Investment Property Loans: Quick Answers to Your Questions

What is an investment property loan?

An investment property loan is a cash credit obtained for the purpose of purchasing a residential or commercial property wherein the property buyer plans to make an ongoing or long-term profit in the future. The money granted as loan may be used to purchase a vacation property, a piece of land, condominium unit, upper fixer property, apartment, single-family house and a single detached house. However, the money granted as loan cannot be used for other business purposes. There are three major types of investment loans, and they are those that require collateral, those that need a big down payment (higher than 20 percent) to get lower interest rates and the ones that either require the investor to pay the down payment cash or only a part of it.

What are the loan requirements?

To be able to obtain an investment property loan, you need to have a good credit score, enough cash reserve to make payments during months when your investment property has no income, at least 20 percent down payment, proof of income and most of all the property that you wish to purchase must pass the property appraisal. For those who do not have a very good credit score, there is still chance for you to get approval. You may consider getting an investment partner who has a very good credit rating. If you wish to get an investment property loan, it is important to strengthen your credit rating at least six months before your loan application. Paying off delinquent debts and closing old accounts only before getting a loan might negatively affect your chances for loan approval. If you have a low credit score, it is most helpful to get professional advice before you do any kind of measures.

What is the process of getting an investment property loan?

Assuming that you have already strengthened your credit score as a preliminary step, the first step is to aggressively shop around for lenders and compare their interest rates before making a decision. Aside from interest rates as your major consideration in choosing a lender, also scrutinize their lending requirements because there are some lenders that are less stringent than others. Then, file your application and you will be asked for your personal information such as your employer’s name and address, your social security number and many more. After you complete the application process, a verification process will be performed by the bank or lender. They will check your credit score and perform an income evaluation. After you pass the verification, the lender will check if you can afford to make a substantial down payment which would be around 20-35 percent depending on the lender you’ve chosen. Applying for investment property loans nowadays have become more strict compared to before, and to get approval you don’t only need enough down payment and proof of your excellent credit record, you also have to choose a property that is worth your investment property loan and that will be profitable in the future.