Basics Beginner: Peer-to-Peer Lending

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1.
Peer-to-peer lending is the practice of lending money to others without going through _______.
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Traditional financial institutions. Peer lending seeks to avoid traditional banks and other financial institutions.
2.
Peer-to-peer lending is generally a not-for-profit activity.
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False. In general, lenders seek to make a profit on the money they lend.
3.
If you obtain a loan from another person through a peer lending Website, that person will service the loan afterward.
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False. Though some may, it is not always the case that they service the loans; third-party servicers might do that instead.
4.
A loan made on a peer lending Website must be registered with the Securities and Exchange Commission.
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True. The SEC regulates these lending activities.
5.
A common advantage of peer lending -- as opposed to traditional financial institutions -- is that there is a lot of information provided about the loans offered.
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False. On the whole, there is less information on peer lending sites than there is from traditional financial institutions.