How to Research Person-to-Person Loan Options

Person to person loans, also called peer lending, circumvent banks as expensive middlemen in the lending process. The process, fostered by advanced global communications, brings lending back to its communal roots and offers lenders and borrowers a new way to deal with loans.

Instructions

1. Look at a few of the top person to person loan websites such as Prosper.com and Zopa.com. Sign up for the websites, read their detailed FAQ sections and take a look at the kind of people who ask for loans, how they're given a rating on the site and the size of the loans they're requesting.

2. Read major news articles about peer lending to get a more rounded and balanced sense of the effectiveness of the practice. Check out MSNBC's article, "Person-to-person lending online gathers steam," and Fox Business' article, "How To Use Peer-to-Peer Lending Sites To Borrow Money."

3. Do some research on personal loaning by checking out what social policy and analysis groups, such as Social Strategist, have to say about the practice. Also research the reports of major financial consulting and trend analysis companies such as Gartner to get a keener insight into the financial and market aspects of the personal loan systems.

4. Use the personal loan system for a small (or even nominal) amount of money to do some firsthand research into the effectiveness, usefulness and reliability of peer lending. Choose one of the many sites that facilitate personal loans and select the loan you're willing to provide or request. On Prosper.com, for instance, you can lend or borrow a $50 chunk and thereby thoroughly research the process.