Every time I turn around it seems like a new peer-to-peer lending service is being launched. The latest, Fynanz, launched in March and is trying to bring the peer-to-peer structure to student loans. If you are looking to get into peer-to-peer loans (or P2P for short), either as a borrower or lender, you have many options to choose from; Prosper, Zopa, Lending Club, and Virgin Money are just the well-known ones that have recently launched. But with all the these sites launching so close together and all with basically the same idea, will the market be big enough for them all?

As the credit crisis forces banks to tighten their lending practices, peer-to-peer lending has stepped in to fill the void in the loan industry. P2P lets people bypass banks and borrow directly from a real person. It works for lenders because the security of being guaranteed and insured against loss is still there like a traditional loan backed by the government. The upside for borrowers is that lenders compete to give them better rates.

Zopa and Prosper seem to be best equipped to last the longest and emerge as the front runners in this yet developing industry. Lending Club, with its unique marketing strategy of first launching as a Facebook app, is targeting a slightly different audience than the rest and this strategy will help them spread their name faster than the others. Read more…

Lending Club is a social lending network where members can borrow and lend money among themselves at better rates. Simple. But Lending Club is also more. Less than a year ago Lending Club was a peer lending application that let users take out loans funded by other users. By the middle of last year, a month after it passed the one hundred thousand mark, Lending Club passed the $500k mark for lent and borrowed money among members. Since then it has grown into a full website. Much like the social finance website Zopa, Lending Club is looking to turn the lending industry upside down.

From Mashable’s, Lending Club 6 Months Later: Does Peer-Lending Work?:

Based on varied interest rates as determined by the individual lenders on a per-case basis, the ROI (return on investment) is high, and the loss has been low. With $3,525,660 lent, only $15,865 has been 16-30 days late.

While traditional lending and borrowing has suffered because of the credit and market crises, a new wave focusing on peer to peer (P2P) transactions has risen over the last couple years, driven by new web technologies (web 2.0) and startup companies. Lending Club has started and grown its service targeting existing groups such as university alumni. And they might just have the edge over their competitors. Unlike Zopa and Prosper, which are its direct competition, Lending Club is the first to integrate its services into a social network (Facebook). Read more…

Zopa, funny name but great idea. The idea is this: Bring together a community of people who help each other financially using the tools of finance and social networking together. Confused? Don’t worry, I was too. I’ll break it down further for you, but first I’ll tell you a bit about Zopa, the global social finance company.

Zopa is a US company chartered in Delaware that also has operations in the UK and Italy. It first launched in the UK in 2005 where it now has over 87,000 users on its peer-to-peer lending website. It launched in the United States in 2006. Read more…