How The Application Works For Peer To Peer Lending
How does the application work?
The peer-to-peer lenders we feature have a completely online application process. Since the peer the peer industry is so new and innovative, you will not see these types of loans on the high street or in the banks. By clicking on the lender of your choice, you will be taken through to their website where you can apply directly. You will be asked to fill in your details online so there is no need to post or fax anything off. The payments are carried out electronically so you won’t need to send in a cheque or call up to repay.
What is the criteria for applying?
To be eligible to apply for a loan from a peer-to-peer lender, you must be over 20 years old and have been living in the UK for at least 3 years. Customers must be in employment with an income of £1,000 per month and have a working debit account to allow for monthly repayment.
The checks that are run
There are two parts of the application, the quote and the application. Initially, you will be asked to fill in a few details including your name, age and where you live. At this point, the lender will run an identity check to confirm your name against your address. The company will also run a ‘soft search’ on your account which is a basic credit check allowing them to see how well you have paid other loans in the past. This credit check will not leave a footprint on your credit file and won’t be visible to other lenders and it won’t affect your credit score. Based on these checks, the lender is able to provide you with a quote – a rate that they believe they can offer you. If you are interested to proceed with this quote, you will be asked to complete a full online application form.
During the full application, you are asked a few more questions about your employment and to provide your bank details. Here, the peer-to-peer company will run another credit check, which looks into your credit history in more detail and will be visible on your credit file to you and other lenders. It is noted that having too much searches may negatively affect your ability to obtain credit because it looks like you have tried to borrow from too many companies.
It will take up to two days to receive a decision and once successful, you will be asked to sign the terms and conditions online and funds can be transferred on the same day.
How does repayment work?
Repayments are made in monthly instalments and are collected automatically from your debit account. Since a peer-to-peer loan can last up to 5 years, you may not require the loan for that long so the lenders offer great flexibility and you can usually repay your loan early at any point and there are no added fees for doing so.