Ledge is a peer-to-peer lending app that allows you to borrow from friends and relatives. The Santa Monica based company was founded in 2013 but its app launched in 2015 with $900,000 in seed funding. Ledge uses the same model that has worked so well for lending marketplaces like Prosper and Lending Club and crowd funding sites like kickstarter and Indiegogo. The only difference—and it’s a big one—Ledge doesn’t charge users for its services.
How Does Ledge Work?
Ledge allows people to borrow from friends and family by creating a campaign. The money could be for anything: moving to another city, pay off dent, start a business or organize a wedding. Why do you need an app to borrow from your friends? Borrowing from peers can get awkward. There are often “misunderstandings” about the terms of the loan. People “forget” to pay.
With Ledge, the terms are clear because you set what the APR and repayment schedule will be. Once there are enough pledges to fund your campaign, money is deposited directly to your account through Venmo. Venmo is a free digital wallet that allows you to make and share payments with friends for free. Repayments are also made automatically to your lenders through Venmo.
How does Ledge make money? As of now, it doesn’t. The idea seems to be to provide financial services to users once the platform has become popular.
What Are Ledge’s Rates and Fees?
You decide the sweet spot between what APR you want to pay and what APR your friends will accept. The rate can be nominal or substantial (within the laws of your state). You and your friends decide that.
How Much Money Can I Borrow from Ledge?
The maximum amount you can borrow through Ledge is $5,000. The maximum term is 6 months.
What Is Ledge’s Application Process Like?
Ledge allows you to find lenders directly through your social media. Share your campaign with your friends. They don’t need to download the app to pledge money. There is nothing stopping borrowers from running with the money and not repaying it. Of course, the same applies with cash or check loans between friends. This app creates a way of making the deal official and public, which may provide the borrower with additional social pressure to repay it.
How Is Ledge Better Than Other Lenders?
Ledge is a hybrid between a marketplace lender and a crowd funding site and it combines the benefits of both models.
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