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
A*
A
B
C
Not covered
All
Not covered
A+
A
B
C
D
E
Not covered
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
�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.
�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.
<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.
0%
0%
0%
0%
The rates on Danesfield
are fixed and therefore not subject to swings.
