Wall Street Journal – Be realistic. It’s important to know from the start how attractive a borrower you are and to set realistic interest-rate expectations, says Jean M. Garascia, associate analyst for Javelin Strategy & Research. The first time Ms. Rizzo asked for a loan on Prosper, for example, it didn’t get funded because the proposed rate was too low for any lender to accept the risk.

Tell your story. Part of the intrigue of peer-to-peer sites is that lenders get to know who they are funding. In some models, explaining why the money is needed and giving some information about yourself can help an investor relate to your story—and decide to lend to you.

Be patient. Unless a borrower is seeking a loan from an acquaintance, it might take time to get funded. “The demand for loans is much higher than the actual capital available,” Mr. Garascia says. “Maybe you’ll get funded in a day…or it may take longer than you were expecting.”

Understand the terms. The loan’s interest rate is important, but pay attention to the terms as well. Unlike credit-card debt, this loan must be paid back in a defined period. The consequences of defaulting on a peer-to-peer loan are the same for any loan—often a ding to the borrower’s credit history. Read Full Article