Basics Beginner: Peer-to-Peer Lending

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1.
If you loan money to another person in the form of an unsecured loan, what must you rely on to ensure that the person will pay the loan back to you?
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The borrower's credit rating. Unsecured loans are not "secured" by collateral or anything else; therefore, the lender relies on the borrower's credit rating.
2.
If you give out a loan on a peer-to-peer lending Website, you must also service it throughout its term.
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False. The site itself may do that, or another party may. It depends on the site, ultimately.
3.
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.
4.
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.
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.