Person to person loans are the loans which are given by one person to another at some rate of interest mutually decided by both the parties. The loan amount in these types of loan can be anything and the rate of interest can be from 0% to anything agreed upon.
This phenomenon is increasing with the advent of social networking through the internet. These loans are becoming quite popular these days. Now there are even some companies involved in these types of loans. These online companies provide this peer to peer functions for all kind of purposes. The loan can be obtained for any purpose such as education or mortgage loans but the most popular way is for the debt consolidations. The best thing about these loans is that there is no bank or financial institutions involved in it. Therefore, no long red tapes in the process of loan providing and obtaining.
What these online companies do is they just bring together the people who want to invest their money to the people who need a loan for their problems. This proves to be a profitable venture for both parties as the lenders get more interest than his money in a savings account and the borrower gets the loan at a rate of interest lower than the bank offers to them.