Pittsburgh, PA., Pertuity Direct has launched operations with the blessing of the Securities Exchange Commission (SEC). This startup, founded on a value of “mutually responsible banking” offers many ways to differentiate itself from the many players in the p2p lending market.
I’ve long followed microcredit but domestic peer to peer lending is fairly new to me. As someone who, shamefully, still hasn’t moved to online bill paying yet (it’s my new year’s resolution, honest), I’ve been just a smidgen nervous about this fascinating new format to borrow and lend in.
Pertuity Direct eases a neophyte’s fears by offering essentially a “peer to peer” mutual fund, rather than commitment to one single loan holder. For those of you p2p purists, this option is also available.
Pertuity Direct screens borrowers well, requiring a minimum 660 FICO score, but showing that most borrowers have at least a score of 720. Interest rates for borrowers range from 8.9% to 17.9%. Fees for lenders are estimated to be about 3.17%.
For borrowers there are additional advantages, including lower interest rates than many other peer-to-peer sites and no auction process to determine the interest rates. For borrowers this means that loans are funded within 2-3 business days after applying. Fees are relatively low, including a 1-2% closing fee, a $15 late payment fee and a $15 (average) fee for late payments. Borrowers can also benefit from 1% discount for Electronic Funds Transfer payments. Another interesting feature is “Pertuity Bucks” which are given to lenders to award as they see fit to responsible borrowers. These can only be awarded to borrowers in good standing, but are applied to the loan to pay down the balance. (When was the last time any creditor rewarded you for paying your bills on time?)
There are some nice perks to being a lender on Pertuity Direct as well. Pertuity allows for monthly or quarterly automatic deposits into your account from your bank account. They also allow you to withdraw your funds early (before one year) at a fee of two percent.
Pertuity Direct is managed by a team armed with credentials that would impress anyone in the business. CEO Kim Mushota spent 11 years with PNC, and Lisa Lough, the VP of Marketing came by way of E*Trade. The Senior VP of Finance, tom McNally comes from Capitol One.
My greatest complaint is that Pertuity Direct does not yet appear to be “Mint.com” compliant; meaning I can’t view my Pertuity Direct investments inside my mint.com financial overview. (Why can’t everyone just get along and play nice?)