Peer to Peer lending is when you want to borrow money without having to use traditional methods such as using a bank or credit union. You can find great peer to peer loan rates at a low cost when you have good credit. Even if your credit isn’t too great, you still have the chance to a getting an affordable loan form online peer to peer lenders.
What Are The Benefits Of Peer To Peer Lending?
Peer to peer lending can be beneficial for you in many ways. These loans are usually made by investors and individuals. Peer to peer lending is when people who have a lot of extra cash offer to lend their money to these individuals and investors who are in need of that cash. There are peer to peer lending services, such as websites that help make this process easier by matching lenders and borrowers, for the transaction to be made. Here are some of the benefits of peer to peer lending.
- The Costs Are Low: Peer to peer lending costs can usually be found at very low prices which are a huge benefit for most people. Paying enough interest will satisfy your lender, and it will compensate your lender. When you have to get your peer to peer loan funded, you will have to pay a fee of 1% to 5% from your loans amount. These are cheaper than getting personal loans from a bank, which can be excessively high in price.
- The Process Is Quick And Simple: When it comes to looking for the right loan for you, this can become a tedious and painful process. Even when you have found the loan you are looking for, sometimes you have to wait a long time to find out if you got approved or not. Whereas, peer to peer loans can ease some of your pain. It has a very simple application process and you will most likely find out whether or not you will get your loan funded. The actual funding process could still take a few days, but if you are in need of immediate cash, there are online lenders who can help you out even faster.
- Credit Matters But You Can Still Get An Approval: Living in a world where lenders do not lend to people who have bad credit history, peer to peer lenders seem to be an appealing option for those who don’t have a perfect credit score. When it comes to getting approved, peer to peer lending does not require the perfect credit score, although it should a decent score if not the best. Peer to peer lenders can also give you other options that other lenders may not provide you with. The worse your credit is, the more expensive these loans will become due to higher interest rates.
What Are The Different Types Of Peer To Peer Loans?
There are still very common types of peer to peer loans such as when you want to borrow for legal purposes; you don’t have to pledge collateral in order to get approved for the loan. These types of loans are the most flexible among all. Putting your money towards debt consolidation or for home improvements, or starting up a new business or even buying a new car, you will need to verify if this would be possible. Here are some of the most commonly used peer to peer loans.
Personal Loans: These are the most common types of peer to peer loans which can be found on online websites. These types of loans are usually quite flexible which makes them extremely popular. Personal loans are commonly used because while bank loans do not lend to people who have bad credit scores, these peer to peer sites will extend their loans to people who have decent credit, if not perfect. If your credit is perfect, you can borrow from anywhere between two to five years. Personal loans are usually done for credit card balances, home improvements, car loans, debt consolidation and even loans for swimming pools. Debt consolidation is one of the major reasons why people seek peer to peer loans. These types of loans allow those people who struggle with high interest rate credit card debts, in order to consolidate their credit lines into one fixed rate loan. This can then be paid off in five or less years. This helps them get out of their debts completely.
Student Loans: Peer to peer lenders can be extremely useful when it comes to student loan refinances or other types of loan. You can easily find many banks and federal government lenders who will help you with student loans, but finding a lender to do your student loan refinances can be tough. When it comes to student loan refinances, the peer to peer sites will closely look at the college community. They keep a criterion which does not only look at your credit score and income, but they will also consider your career experience and your education which includes your field of study and history.
Business Loans: Business loans are becoming increasingly common with peer to peer lenders. Even though banks offer business loans, they also have extremely tough lending criteria making it difficult for people to apply for them. With peer to peer lenders, they bring you all the same advantages which other types of loans also have. Some of these benefits include low interest rates, simpler application processes, and quick turnaround time and credit flexibility. This makes it easier to achieve business loans from peer to peer sites which are not commonly found at traditional banks.
Bad Debt Loans: Peer to peer lenders make it easier for borrowers who have fair or poor credit scores and are not accepted by banks that have very tough loan criteria. There are many peer to peer lending sites that make loans available to you on an unsecured basis, which gives you a source of credit that could replace higher interest credit cards. They also have the ability to make installment loans in order to replace your credit. This makes it an easier and faster way to get out of debt.
If you are looking for the right type of peer to peer lender, you can find out more information on the Quiddi Compare website.