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.
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.
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.
4.
The lack of an intermediary in peer lending results in _______ overhead costs overall.
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Lowered. As a rule, there is lower overhead due to many services being cut out.
5.
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.