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Peer-to-Peer Borrowing

Unlike peer-to-peer lending, peer-to-peer borrowing is not too dissimilar to borrowing money online from any bank or building society.  Instead of borrowing money from a company you are borrowing money from real people.  Peer-to-peer companies only tend to cover the top credit grades, so if you have had some credit problems in the past then it is likely you would be turned down.

Below is an approximation of the credit grades that are covered by each provider:

Company Approximate Credit Grade
                                       
Zopa A* A B C Not covered
RateSetter All Not covered
YES-secure A+ A B C D E Not covered
Danesfield A B C Not covered

Loan rate variation

Each provider uses its own lending model and there will be variations in the rates offered due to various factors affecting supply and demand.  There are annual variations with January typically a busy month for loans and therefore rates would be higher (due to increased demand and constant supply), but conversely August will be a quiet month for loans and therefore rates would be lower.  Most individuals tend to make repayments around the 1st day of the month, and therefore rates would be lower (due to constant demand and increased supply).  As the underwriting (checking and approval) of the loans usually happens during the week, the rates would be higher at the end of the weekend as funds are tied up waiting to be approved or rejected (due to increased demand and reduced supply).

Company Annual
variation
Monthly
variation
Weekly
variation
Application
variation
Comments
Zopa 0.5% 0.5% 1% 0.2% As Zopa operates a dynamic market there can be moderate swings in the interest rates.  The lowest rates are typically on a Monday or Tuesday afternoon and a few days after the start of a month.  Rates are typically slightly lower at the end of the year.
RateSetter 0.5% 0.2% 0.2% 0.2% The swing of rates on RateSetter are smaller than on Zopa, but the lowest rates are typically a few days after the start of a month.  Rates are typically slightly lower at the end of the year.
YES-secure <1.0% <1.0% <1.0% 2% As YES-secure operates listings the swings are primarily related to what the borrower contributes to their application.
Danesfield 0% 0% 0% 0% The rates on Danesfield are fixed and therefore not subject to swings.
Please refer to sources of information