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If I was looking to consolidate some credit card debt and wanted to use a peer to peer lending service, what things do I need to look out for?

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    Wow - I've never heard of a Peer-to-Peer lending site! Very interested in this answer. – Nat_Rea Jan 21 '10 at 23:49
  • The top 3 reported in a google search are prosper.com, lendingclub.com, and peer-lend.com. – Jeff Martin Jan 22 '10 at 15:12
  • Similar but not duplicate money.stackexchange.com/q/1641/3361 – Ellie Kesselman Jan 9 '12 at 18:42
  • that is actually the duplicate of this, this question was asked first – Jeff Martin Jan 10 '12 at 19:33
  • @JeffMartin So I see, but I'm not sure what to do, as that later question was made a community wiki. I'll try looking around on meta. Thanks for mentioning it though, as I needed some motivation ;#) – Ellie Kesselman Jan 17 '12 at 7:48
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Main advantages

  • you are closer to your lenders, not some impersonal bank
  • you are more likely to get a favorable rate
  • more flexible terms

Main disadvantages

  • You are closer to your lenders(see advantages), it is not as bad as borrowing money from your friends or relatives, but the personal factor can come into play(even though p2p lending sites serve as a bit of buffer).
  • You need to be aware on how the lending sites get paid and how much. Obviously you should not have to pay anything in advance to originate a loan(those are generally scams).
  • Finally a very subjective opinion, but I think in terms of financial returns p2p lending is not that great for lenders, but good for borrowers, precisely, because individual lenders are not that great at determining credit risk of borrowers.

In any case it should not concern you too much, as long as you can get your loan.

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    some links to p-to-p lender would inprove this answer – Ian Jan 29 '10 at 21:25
  • I agree with mr. google there. Some links to different sites and ways they mitigate risk to lenders would be nice to know. – Jeff Martin Feb 1 '10 at 0:37
  • +1 for articulating that the risk/reward is better for the borrowers than the lenders. – Stainsor Apr 27 '11 at 14:44
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Prosper and Lending-Club are the two main sites for this. I was on Prosper for a while. To get a credit card consolidation at a good rate, you need a good credit score and you need a good narrative. You will be putting together what is basically a presentation to strangers on why you need the loan and that you are perfectly capable of paying it back. The second part is important. You will want to state your income and your job stability to show that you will be able to pay this loan off over the 3 year life of it.

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