Peer to Peer lenders.

33 Replies

I've been investigating several peer to peer lenders lately and I'm a little weary of them.  Some are banned in certain states and I have other concerns. Has anyone used or does anyone know someone who used Lending club, Prosper, or any other peer to peer lending group to fiance a deal? And it seems like their interest rates are a bit high compared to traditional loans in my area. And what kind of deals do people think they would be good for? They seem to have looser terms and less restrictions and have high minimums like $100,000 for Realty Mogul which is one of these peer to peer sites solely for real estate deals. 

Hey Shawn,

I have never used a peer to peer lending site for anything but there is a BP podcast on this exact subject.  It is podcast #29 (an older one) with Dawn Anastasi.  I believe she is active on the site maybe try reaching out to her.  Good luck.

Originally posted by @Steven Forman :

Hey Shawn,

I have never used a peer to peer lending site for anything but there is a BP podcast on this exact subject.  It is podcast #29 (an older one) with Dawn Anastasi.  I believe she is active on the site maybe try reaching out to her.  Good luck.

Yep!  Here is the podcast on peer to peer lending.  I used peer to peer lending to buy houses but there are many other uses for it.

I'm actually looking to use Lending Club or SoFi to fund my rehab.  I'm going to take out a loan big enough to cover the rehab and 6 months worth of payments for the loan so that I don't have to use any of my own money until I do the cash out refi.

My husband just tried Sofi. We saw a home we liked outside of our limit but the cash flow was too good to turn down. Sofi states it will take up to 14 days to verify information. He was approved in 2 days. After talking to a few people who have used Sofi, we noticed almost everyone was given the same rate. So he called them up and they knocked off a good 3%. So far they seem reall easy to work with. No fees. Simple application. Funds within 3 business days. The lady said if it takes more than 3 business days, something is usually wrong.

@Kevin Trumbull We used their personal loan. They do not allow you to use their mortgage loan for investment properties. The property will have to be your primary or secondary home only. You also have to live there for at least a year. I do know someone who has used sofi for a second home and rented it out immediately. But that can only happen once unless you refinance with another company and start all over. We used it for a cash purchase as well as 2 down payments for conventional loans. Note: All the properties are rentals with tenants in place. One home covers the monthly Sofi payment, its mortgage and still has a cash flow. They loan payoff is a max of 7 years. 

Interesting, right at the bottom of the Personal Loan application page it says:

"By checking this box you certify that your loan proceeds will not be used to pay for post-secondary education costs, or to invest in real estate or securities. Except as detailed in this consent, the SoFi Personal Loan may be used for personal, family or household purposes."

So I was thinking we can't use the Personal Loan product for rentals, but I always wondered 'how would they know'. :)  I guess there is a risk, if they find out, maybe they could call the loan due?

So it sounds like SoFi won't loan on a small multi, even if you're going to live in one of the units?

Not sure but I spoke with SoFi on the phone and asked several questions since we planned on using them more than once. They were well aware that we were investors and even stated they work with investors all the time. Also, they lower their interest rate for investors who use them regularly.

The first was 10% for 50k. The second time we applied, but didnt use, it was 6% for 75k. We also have high credit scores over 720 so it definitely makes a huge difference.

Originally posted by @Nikki Grizzle :

The first was 10% for 50k. The second time we applied, but didnt use, it was 6% for 75k. We also have high credit scores over 720 so it definitely makes a huge difference.

 @Nikki Grizzle, I wonder if you were able to get another loan from them, how is it going so far now that couple months passed. I definitely keeping peer to peer lending as one of finance options. Thanks in advance!

@Angela Kriv We have not applied for another loan through Sofi as we have not had to. I do know that once you develop a relationship with them your interest rate will fall. They also send you awesome goodies. T-shirt, heavy duty bottle and wine opener and a selfie stick lol. I sort of want to get another loan to see if they have anymore. We never got goodies from anyone else.

@Angela Kriv  They do a soft pull. He said it did not hurt his credit at all. I do know a few years ago people had issues with them doing hard pulls and was false advertising but it seems that they have gotten much better. So far I know a few other people who have used them with no issues.

I was looking to take out a personal loan at Sofi.com for a local property purchase.  It looked without digging too hard that the maximum loan was $40,000.  Have they changed their loan values or do I just need to look deeper into it?

thanks for any response on this older thread.

@Daniel Hanson , I took out a personal from sofi for 50K at 8%. Used it for purchase and rehab of 2 properties along with a loan from my 401k. That was the maximum amount I could borrow at the time. That was back around September- October 2015.