LendingKarma is an online service that helps people lend money to the people they already know, also known as person-to-person lending. Lenders love us because we help formalize loan agreements, calculate payments, track and record payments, and send out friendly reminders to borrowers. Borrowers love us because we make it easier for them to approach potential lenders in their social circle, by helping them present a good proposal.

Person-to-person lending works because when you know someone personally, you know whether they can pay you back. A person sitting behind the desk at a bank or at a credit agency isn’t privy to the same information. They may not realize that your friend fell behind his payments because he had to care for an ailing parent. Or, that your sister’s ex-husband ran up their joint credit card bills and ruined her credit. At the end of the day, you know their specific situation, and you can help them out.

The first step to ensuring a successful person-to-person loan is to clearly define the terms of the loan in writing. This helps protect your relationship and your money. Remember, you’ll also want to include in the loan agreement, all terms, expected repayment schedule and interest rates. LendingKarma offers standard loan agreement templates to help you formalize your agreement and also helps you to calculate payments based on an agreed-upon interest rate. LendingKarma also offers a loan payment tracker product that helps lenders and borrowers track and view those payments. For lenders, LendingKarma provides a way to record these payments and keeps borrowers on track by sending them friendly reminders. LendingKarma’s payment tracker is flexible enough to adjust along with any changes in your repayment schedule. Want to pay down your loan faster? Need to figure out what to do with an underpayment? Received a late payment? LendingKarma’s payment tracker will help with all of these scenarios and keep things on track with a high level of transparency for all parties.

You can get started by visiting our home page. From there you’ll be asked a series of questions that will guide you through the 4–step loan creation process. Once you create a loan agreement and have finalized the terms, you can print out the document and sign it. You can also optionally use the LendingKarma payment tracker to keep track of your loan all the way through repayment. If you choose not to use the payment tracker you can also track payments received using the payment schedule in the appendix of your Promissory Note. You can edit your loan agreement any time provided you register with LendingKarma.

Yes. LendingKarma supports both types of loans. If you want to secure your loan with collateral, LendingKarma allows you to input information about the collateral so that it gets included in your Note. If you are creating a secured loan, you may want to consider filing a UCC form to record the security with your state. To learn more about the loan types LendingKarma supports as well as more information on UCC forms see our loan education center.

Yes. The LendingKarma Promissory Note is a legally binding contract between the borrower and lender and is enforceable in a court of law. Of course, we hope you never have to enforce this contract. In fact, we believe that using LendingKarma to document and track your loan increases the likelihood that the loan will be a success and never require legal enforcement.

LendingKarma uses the information you enter to create your custom loan document. We do not sell or give away any of your personal or loan information to any third parties. Read our privacy policy for more information.