Peer to Peer Loans, What is The Average Loan Amount You Can Be Approved For?

Peer to peer lending has grown at an explosive rate in the United States, averaging 84 percent of growth every year starting in the second quarter of 2007. Used as a way to sidestep the more traditional lending process that comes with going to a bank, peer to peer lending is poised to remain a part of the market for a long time to come.

peer to peer lending

What is Peer to Peer Lending?

The short version is that peer to peer lending is a form of lending that happens between individuals rather than between a bank and an individual. A person who needs money will join an organization like, and lay out how much he or she needs for a loan. The individual will submit his or her credit history and risk, the same as would be done with a traditional bank loan, but the request goes out to the community instead of to a business. Those in the community may choose to fund the loan (with a minimum buy in of $50 in most cases), and once the full amount is reached the loan is given. Once it’s given the loan is paid back, with interest, the same as any other kind of loan would be.
How Much Can Someone Get?
The answer to how much money one can ask for varies from one site to another. On a site like the Lending Club (which is typically populated by those with good credit histories and high incomes who want to avoid traditional banks) the average loan given is just over $11,000. This is significantly higher than loans made in communities like Zidisha, which is a not-for-profit site that focuses mostly on giving microloans to developing nations.
So part of how much money you can get approved for depends on which website you go searching for lenders on. The rest of it depends on how much of a risk you pose as an investment. If you have a solid credit history, and it’s shown that you have paid back all the loans you’ve been given without fail, then lenders are going to look at you as a safe opportunity to make money.
That’s one of the things that hasn’t changed much between traditional bank loans and peer to peer loans; lenders are there to increase their own wealth. The more rock solid an individual asking for a loan looks, the more likely he or she is to get the money that’s being asked for regardless of how much it is.