Comments on: Peer-to-Peer Lending Risks During a Recession

By: Tiffany

Tiffany — Fri, 06 Mar 2009 12:54:52 +0000

If you are referring to getting turned away from a credit union in regard to membership, you do have to be eligible to join a credit union. However, most people have access to one. Some credit unions are offered as an employee benefit (as your HR department if you aren’t sure), and some credit unions offer membership to anyone who lives/works/worships/volunteers in a geographical area.

If you are referring to getting turned away from the credit union in regard to being denied for a loan, sure, this can happen. You do have to qualify, and credit unions do have conservative loan practices. However, credit unions make loan decisions differently from banks…they consider other factors that banks often do not. They look at the whole situation, rather than ruling out the borrower because of numbers alone. Their niche is the average Joe that banks oftentimes don’t care about.

By: Kevin

Kevin — Fri, 06 Mar 2009 03:25:29 +0000

@Stephanie: Ah, good math. Better than negative 50%!

@Tiffany: Very good point. As I said I am not sold on this. Is it possible that someone might get turned away at a credit union and there only resort would be personal lending? (I wouldn’t be interested in the loan in that case, but just curious).

By: Tiffany

Tiffany — Fri, 27 Feb 2009 19:52:12 +0000

Instead of P2P lending, people should try getting a loan at a financial cooperative (a credit union). You get the benefit of members pooling their money (which results in more affordable rates) without all the risk. Of course, the best situation is to not borrow at all, but if you have to, make banks your last resort!

By: Stephanie PTY

Stephanie PTY — Thu, 26 Feb 2009 03:28:47 +0000

@Kevin: hmm… let’s see… $50 present value, at 13.5% for 40 years with no additional payments is… $7,921.45! Not exactly millions, but not bad either.

By: Kevin

Kevin — Thu, 26 Feb 2009 03:05:05 +0000

@Stephanie: That’s essentially what I did. We will see what comes from it. I may continue to invest my profits and one day we’ll both have millions

@Personal Finance Firewall: Very true, but I would prefer to really know the person before I just handed out money.

By: Personal Finance Firewall

Personal Finance Firewall — Thu, 26 Feb 2009 01:38:27 +0000

I think this is always risky regardless of the economic state but it gives a higher return for the risk and that is why it is a favorable method to make a return now, and any time. I mean peer lending is based on a person to person basis. A persons financial situation could be bad or worse when the recession clears up.

By: Stephanie PTY

Stephanie PTY — Wed, 25 Feb 2009 17:29:00 +0000

I signed up for LC this week, and I’ve started playing with just the $50 bonus. I don’t have income to invest right now (cause this is such a great time to be graduating college!), so it will probably be a while before I put any of my own money in, if ever. I like the idea of just watching to see what happens to my “fun money” that’s in the account. Maybe after a year, I’ll put some of my own cash in.