Peer-to-Peer Lending, commonly referred to as P2PL, is exactly what it is: a person-to-person lending. It is an alternative to traditional credit lending for small loans.

Peer-to-Peer has become a great option for people who need a personal loan and people who want to lend it to them. Peer-to-Peer Lending is a type of micro lending.

P2PL companies, such as Lending Club and Prosper, manage peer-to-peer lending online in these major three steps:

Check the borrower’s credit to make sure they are eligible for a loan

Assist investors to lend money to the borrowers

Help borrowers to pay their loans back to the investors

The reason for the growth of the peer-to-peer lending’s popularity for both consumers and the lenders are these major reasons:

The interest rates are generally low for consumers who want to get a small loan

The loans are term-based, generally 2-5 years versus traditional bank loans

The Investors get a better return on their investments.

Even though the interest rates are low, they might be higher depending on the risk involved and that has to do with the borrower’s credit score.

The better your credit score is the better are your chances of getting lower interest rates, because of the lower risk for the lenders.

Who is P2PL for?

It is for anyone who needs to get a small personal loan. Generally people who want to consolidate their debt, like credit card bills or for a person who might have an unexpected expense.

What are the advantages of getting P2P loan?

Lowest interest rates

Fixed rates that would not go up

Fast and simple applications process

Low late fees

No prepayment penalty.

For example, Prosper offers unsecured loans from $2000 to 35,000. Their interest rates are from 6.6% to 35%. The loan average is about 13000 with 13.9%. The investors earn in average between 5%-9.5% depending on the risk involved.

Lending Club: Their personal loans are from $1000 to $35,000 with interest rates from 6.6% to 29.9%. Average loan is about 15,000 with a 13.4% APR.

Do these companies have any fees for their services?

Yes, both Prosper and Lending Club have a fee for new loans. Lending Club has a 1.11% – 5% fee of the total loan amount. And Prosper has 1-5% fee. It varies based on the size of the loan. The origination fee is included in your APR and then subtracted from your total loan balance before you receive your loan.

On late payment fees both Prosper and Lending Club have a low fee of $15.00 charge for the bound check or 5%, depending on whichever is greater for over 15 days late payments.

Why can these Peer-to-Peer Lending companies offer low interest rates and fees?

All the process is done online, unlike other finance institutions that have lots of overhead expenses; the P2PL companies have fewer expenses so they can pass on their savings to the consumers.

What are some of the drawbacks of Peer-to-Peer Lending?

You must have a good credit score

Fees to pay

If you default on your loan, it will have an adverse effect on your credit score rating

Higher Payments

Higher interest rate based on your credit score

Note: Always research to understand the risks, conditions and terms of each company’s loan terms.

How does it work?

Each P2PL has a quick online step-by-step process for you to follow. First step is to fill out the online application. You also need to have a good credit score to be eligible. The process usually can be as fast as seven days.

Are there other P2PL Companies that offer different types of loans? Here is the list of some P2PL companies, which offer different types of loans:

Funding Circle offers business loans

Lending Club also offers small business loans beside personal loans

SoFi for refinancing student loans

Kiva is a non-profit that helps alleviate poverty in other countries by lending them money

Other Peer-to-Peer Lending companies for personal loans beside, Lending Club and Prosper:

Upstart offers personal loans

Zopa offers personal loan (a UK-based company)

You also want to be aware of scams – Read this article for what to look for here.

Finally, before you get any loan, make sure that you do your own thorough research and find the best alternative that works for you and your situation.

The post What You Need to Know to Invest in Peer-to-Peer Lending first appeared on Whole Hearted Way.

We are told that we are all special and going to become president but we aren’t told that saving a few bucks every day will not make us millionaires but will make us a lot more comfortable than if we didn’t save. Don’t stress out for the top but be happy with the middle ground. It’s achievable with a few bucks every day.

Look back not forward because we can learn so much from our mistakes. Selling your gold jewelry to a what looked like a reputable firm only to find out after the fact that you paid a 30% commission. Mistakes like this teach us – buyer beware! Get fee disclosures and all the facts upfront.

Take action on what did work. I thought social media was for those GenX and Yers but now I get most of my clients through my social media marketing. I enjoy it and will continue to do it. Keep revising your goals. Times change. You change. Go with it. There is a tipping point where you must say- is this working for me or do I need to let this go? You don’t want to be the person who says after 30 years on the job that you should have left 20 years ago.

Track your progress. This is a reality check for me because the numbers don’t lie. You may think you are on track for a comfortable retirement but what does your calculation say? Tracking helps motivate and clear the path for you to keep plugging away.

Get good advice. There is a time to put the numbers aside and talk to someone or a lot of people. The best thing a mentor recommended to me was to get a personal “advisory board”. These were a combination of close friends and business associates that I trusted to tell it to me straight so that I could become not just a more successful business woman but also a better person in the world. Now I mentor others.

Keep these tips in mind when planning your new year, and celebrate your journey to success (before reaching success).

The post Why You Don’t Reach Goals And Why You Will This Year first appeared on Whole Hearted Way.

I want to change the way you think about money! It’s hard to find the real truth in financial
information today and even harder to know whom to trust. That is about to change.

Among the key findings in the CFP Board (Consumer Federation of America Household
Financial Planning) survey are that people today are facing tough choices about how to allocate
more limited financial resources. “Saving enough money for future goals…while also
maintaining an adequate emergency fund and staying out of serious debt has always been a
challenge…Advances in technology have made accessing and analyzing financial information
much easier, however a lack of understanding about savings and investments options as well as
how to best manage household finances remains a serious obstacle to Americans financial
preparedness.”

55% of Americans say, “It’s hard for me to know who to trust for financial advice.”
Our financial planning articles are written by fee-only Financial Advisors and Certified Financial Planner licensees.

52% say, “Investing seems complicated.”
After every article, we have action tips in each financial planning category to make it easy for you.

55% say, “I’m worried about losing my money if I invest it.”
In each issue, there are proven tools and resources to help you make money, not lose it.

My meditation teacher told me that the mind is a powerful ally that helps us focus on what we
need to do: study, play sports, cook, save and invest, etc. Look for insightful articles from spiritual teachers on how to connect to and attract abundance in your life.

There are no ‘“Get Rick Quick!” schemes. This is about making the best of each dollar to support you and your family in what you want to do now and in the future. You will hear from financial psychologists who will offer advice on how to build healthy financial behaviors.

Let’s not forget the inspiring stories from people successful at getting out of debt, saving and investing.

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The post Putting Your Money Where It Matters- Mindfully first appeared on Whole Hearted Way.

I’ve always talked about the problem of falling in love with your investments and I’ve seen it all over the 20 plus years in my office – tears, marital fights, family arguments, etc. As a Wealth Coach it is my job to be objective and impartial. I’m the number cruncher who can show you the decisions that need to be made and explain the consequences. I can even make a list of the non-financial pros and cons of whether to buy or sell.

However, I now find myself facing the same dilemma as I oversee a team of professional cleaners – cleaning what was once my home in San Francisco. A hasty move happened due to a lengthy hospital stay. As my husband and I try to make sense of whether we should sell or rent it, I feel my objectiveness go out the window. I crunch spreadsheets to no obvious answer. I resort to a simple list of pros and cons which brings me to 50% sell /50% rent.

It occurs to me that no number can make you unravel the college fund of a deceased son, or sell the family summer cottage, or as in my case, sell my former home that I now stand in after a long medical journey. There’s a lot more there than numbers in personal finance and I feel like that’s why I so eagerly embraced the coaching profession. When people think of a coach, they think of a coach of an athletic team. But a professional life coach is not like that. Unlike my Financial Advisor career, I don’t try to “fix” the client but rather work with what they have and where they are at. I also do a lot more listening – deep listening, since most of my clients I have never met in person. All of my coaching sessions are over the phone. The coaching conversation model has the client talking most of the time and it generally follows these 5 components:

1. Focus the conversation on what the ideal outcome would be like
2. Discover the possibilities
3. Plan the action
4. Remove the barriers, and identify support and resources.
5. Review and set the stage for next steps

More well known companies (Google, Kaiser, Dell, and Motorola) are embracing the coaching experience for their executives and the general public is catching the wave, too. The cleaners are gone now. I think I will call my Coach.

The post Love and Investments first appeared on Whole Hearted Way.

Your 401K contributions are your first investment dollars. Those dollars will grow more faster than any other investment because of the tax advantages that we discuss in detail here. Take advantage of the opportunity to contribute and put the maximum amount that you are allowed in the plan. Your future depends on it.

The post 401K Today for Your Best Tomorrow first appeared on Whole Hearted Way.