Many homeowners have come against a stone wall if they are looking for a home improvement loan nowadays, since many of them do not have enough equity in their residence to act as collateral for the loan, due to falling home values, but there is a solution.

That solution is peer to peer lending. Peer to peer lending is a group of investors (lenders) and borrowers who meet on a site and bid on lending or borrowing funds. What happens is that banks and other institutional lenders are eliminated so that the lender can earn more money and the borrower can pay less.

And, peer to peer loans are personal loans, so collateral is not pledged, and therefore the value of your home is not part of the loan consideration. This gives homeowners a new way to obtain a home improvement loan for needed or even just desired changes, such as additions, renovations and other improvements.

Many improvements, such as additions to the home, and renovated kitchens or bathrooms pay for themselves in an improvement in the value of the home, and in the meanwhile you can prepare meals in your wonderful new kitchen or enjoy exhilarating showers in your new bathroom. In addition, there are other home improvements that save the homeowner so much money that they become self funding even as you enjoy them, such as high efficiency appliances, high energy rated furnaces or water heaters, new insulated windows and doors, etc. Energy bills are extremely high, and no one expects them to get any better, so these types of improvements can save thousands of dollars annually.

Nothing could be simpler than applying for a peer to peer loan. Peer to peer lending sites are specifically planned to make the process easy for the borrower and for the lender alike. A borrower merely has to A) Set up his loan listing B) List the listing on the site C) Wait for lenders to bid on his loan. Business is still business, so your credit rating will continue to have an impact on your loan rate, but lenders are able to accept lower rates because there is no bank in the middle taking a piece of the profit.

Some lenders prefer small loans of about $1,000 or so, while there are many investors who are investing larger sums in their loan portfolio, but the average range is up to about $15,000. These amounts seem almost tailor made for home improvement loans, since an energy efficient washer and dryer would run about $1,000, and an average kitchen remodeling job would cost about $15,000, perfect for the homeowner with these projects in mind.

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