Peer to peer lending (P2P), or social lending, is a new process of connecting an individual borrower with lenders, without using traditional banks to obtain an unsecured loan. As a potential borrower, you can post a request for a loan, along with a brief description of how you will use it. The borrower and lenders are strangers; their only knowledge of each other is through the P2P website. Although the idea seems very informal, a peer-to-peer loan contract is a formal, legally binding agreement between two parties; checks and pay stubs are required. There can still be fees for late and missed payments. The lenders must report your loan payment history to the credit reporting agencies.
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