P2P lending is the term to describe someone lending money from another or number of others instead of going through a lender such as a bank, building society or credit union. Just like a normal loan, the borrower repays it over time, with interest. There is a loan agreement and there may or may not be security.

The traditional model is where investors invest in a fund and the borrower applies through an electronic method. The rates, in this case, are determined by the marketplace. Then there are those that are strictly person to person where there is more transparency for both the lender and borrower. Terms, rates, costs and risk levels are determined by the person lending the money and the borrower in this model which is the model IHQ deals with.