P2P loan rates for borrowers with excellent credit start at 6.99% APR. The interest rate is fixed throughout the term of the loan and payments remain consistent from month to month. Additionally, there are no prepayment penalties, so borrowers are free to pay off or refinance loans at any time.
Borrowers with poor credit receive similar repayment terms and fee structures, but the interest rate assigned will be higher depending upon the negative factors in a particular borrower's credit profile. If at any time during the loan the borrower's credit score should improve, the borrower is free to refinance the loan at a potentially lower interest rate.
Peer to peer loans have lower interest rates than traditional bank financing because the loans are funded by individuals and institutions in an online marketplace. P2P funding platforms are inexpensive to operate and those cost savings are shared with borrowers (and investors) via reduced interest rates and fee structures.
Investments in peer to peer loan notes are currently realizing an average ROI of approximately 8.00% (in diversified portfolios). Higher rates of return are possible by investing in notes with higher risk (and, thusly, lower credit quality), though, for the risk averse and wise investor, who diversifies over a large number of loans, it is historically reasonable to expect internal rates of return in the 6-8% range. Past industry results are no guarantee of future performance and no solicitation to purchase securities from P2P-Credit.com or any other party should be inferred.