Basics Beginner: Peer-to-Peer Lending

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1.
Peer lending Websites act as ________.
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Brokers. The role of the lending site is to broker the transactions.
2.
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.
3.
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.
4.
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.
5.
Which of the following is not an advantage of peer lending?
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The amount of information about the loans. This is not an advantage; investing in a loan should involve getting all possible information about it.