In one sense, peer to peer lending is as old as humankind. At some point, one caveman lent another caveman an axe, and we’ve been borrowing and lending ever since.
Traditionally, lending was limited to people who were close enough – geographically and personally – to perform the transaction. In other words, family and friends would lend money to each-other.
Modern technology has changed all that. Peer to peer lending sites harness the power of the internet to bring together borrowers and lenders from across the world.
Different P2P lending platforms offer different loan terms and interest rates. They also use different metrics to determine a borrower’s creditworthiness.