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Wednesday
Mar042009

Friends asking you for money?

Mainstreet today offers good advice to individuals who are finding themselves in the position of would-be lender to friends and family who have fallen upon hard times: Make the loan official. And consider using an official peer-to-peer lending site to facilitate.

The trend of using peer-to-peer platforms for everything from charity to student loans is up: "Virgin Money USA, which administers loans among friends and family members, says the dollar value of loans outstanding has soared to $390 million. That's nearly double from October 2007, when the company launched." As we've profiled, Virgin Money offers a way to formalize loans between people who know each other, managing the transactions and hopefully, reducing some of the relationship strain.

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Reader Comments (2)

Great idea!
I used Lending Club for my loan 6 months ago. I asked my brother to fund half of it and he did, at 9% interest rate. The good thing about doing it through Lending Club is that i did not have to ask him for the full amount. The bad thing about Lending Club is that it does not work for everyone. I had good credit score and was able to use it. I understand you can use Virgin Money even if you don't have a good credit score.

March 5, 2009 | Unregistered CommenterDerek

@Derek. Exactly right. That's what makes Virgin Money great for students and others with either fledgling or below average credit scores. There is no minimum, but both the lenders and the borrowers know what they are getting into (presumably the lender knows something more about the borrower than his credit score that makes him think that the loan is a safer bet) and the site can help do the payment reminders and other lending mechanics.

March 5, 2009 | Registered CommenterMelody
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