Personal loans in America have already borrowed more than $ 120 billion a year. Most of them are caused by economic growth and a decrease in unemployment. Many Americans feel freer about taking additional financial obligations. Also, there were possibilities such as try P2P lending as fast cash source, so people saw more opportunities for themselves to solve their everyday financial problems.
Home repair or improvement of their car many Americans see the real prospect of today that is available. With the growth of economy, there is an improvement in lifestyle, which entails an increase in needs in all areas of life.
In addition, new ways to borrow the necessary amount of money provide additional opportunities for Americans. If you want to try P2P lending, one of the newest ways to get financial support, then read on to learn as much as possible about this method, to understand how to use it and what exactly you will have to face.
Read more about P2P lending
When you decide to try P2P lending (peer to peer), you need to understand that this type of lending is different from traditional lending methods. The essence, of course, remains the same, when lenders give money to borrowers at a certain interest rate for a certain period. But exactly how this happens has certain fundamental differences from traditional loans.
When you take a regular loan, you get money from financial companies or banks that are engaged in lending. In the case if you try P2P lending – you receive money from the same users as you are, while not only one person credits you, but few of them.
That’s right, you get money from ordinary people of the same kind, while you can act as a lender if you have available funds. If you need a loan, then you can borrow them from other people by paying an interest rate, provided that you meet certain requirements for borrowers.
P2P lending platforms act as an intermediary to make loans that are safe and beneficial for both parties of the transaction. How safe is P2P lending to try? Let’s take a closer look at this moment.
How safe is P2P lending?
This type of lending as P2P is usually as safe as borrowing money from any other lender. In some cases, it may be even safer than some companies or individuals, who may attribute hidden fees or terms described in small print. Such conditions may require you to pay endless payments, interest rates or penalties in the future.
P2P lending platforms typically provide a fairly high level of protection for both parties, ensuring that the legality of transactions is respected and that your personal information is preserved against unauthorized dissemination.
How fast is this happening?
When you urgently need money to solve problems that have suddenly arisen, when something has broken down and needs urgent repair, or when you need urgent medical care, then you probably won’t get money as quickly as you did in a payday loan. This process is due to the many people involved in lending.
Crowdsourcing involves not instant decisions of one lender, who at the same time takes a very high interest rate for such a speed, but the participation of many lenders simultaneously. This approach reduces the risk for each individual participant in a credit operation, but at the same time it takes a little longer. Usually the decision on lending can take up to several days.
What is the first thing you need to know with P2P lending?
If you want to try P2P lending, then it is worth remembering that there are no specific risks that are not found in other types of lending. You should always understand the interest rate under which you take a loan, as well as all the conditions that may oblige you to make any additional payments.
You must understand all the fees that you will have to pay, as well as the consequences of various actions, such as late payments or incomplete payout of debt at a certain time.
If you try P2P lending, then you should also remember that if you do not pay your debt, then you will have the same consequences as if you did not pay the debt to a bank or other financial company, such as collection companies, threatening calls and lawsuits.
Is P2P Lending suitable for people with bad credit?
Usually, people who have a low credit rating are the most in need of loans, but P2P lending is unlikely to be for them the solution to their financial troubles.
Since ordinary people are lenders on P2P lending platforms, these platforms impose no less stringent requirements on borrowers than banks and other financial companies. People providing loans on P2P platforms are investors for these sites, so they try to eliminate highly risky transactions so as not to alienate their investors.
Of course, the requirements on different platforms will be different, but most of them that can be called reliable will tough refer to the borrower’s credit rating very strictly and scrupulously consider the risks.
In order to try P2P lending on one of these platforms, you will need both good credit and good income, which you can confirm, so if your credit cannot be called good, then you can hardly expect credit approval on one of the P2P platforms.
How many credit points should I have in order to be able to get a loan on a P2P platform?
Since P2P lending platforms are created by different people or companies, and there is no law regulating this, there is no single standard by which P2P lending platforms approve a loan.
You can take only specific examples, which, however, are still not standards, because the request of each borrower is considered individually and takes into account all the conditions that are different for everyone.
For example, on one of the most popular platforms for try P2P lending Upstart, the average borrower has an income of about 80 thousand dollars per year and 688 credit points, but these figures will differ on different P2P platforms. Somewhere these indicators, as well as the requirements for the borrower will be lower and somewhere may be higher.
Before applying for a loan on one of the P2P platforms, review all the information, see what minimum requirements they impose on their borrowers so that your credit rating does not suffer more when an unsuccessful request for a loan occurs, since the data from the P2P lenders are also transmitted credit bureaus of the United States and are as important as information from other sources.
Where can you try P2P lending?
To get a P2P loan you need to go to the website of one of the P2P lending platforms. You can find many such platforms through any Internet search engine, such as Google. Below we look at several popular in our country, which have already earned a reputation.
This is one of the P2P lending platforms, which has established itself as a platform with quick approval or rejection solutions, as well as a simple and convenient interface. However, this platform is positioned as a platform for people with good credit.
If you want to try P2P lending and solve your problems with credit cards debts, then you can take advantage of the opportunities offered by this, one of the most popular P2P lending platforms in the US.
This is a very popular P2P platform that small businesses often like to use. The costs associated with the business are most often covered by loans taken on this P2P lending platform.
Is P2P lending right for you?
We tried to set forth as clearly as possible here about P2P lending, so that you have a clear understanding of this phenomenon. Now you can decide whether or not to try P2P lending. This may be the right solution for you and you can use one of the P2P lending platforms to get financial support. This is a great way to do this without the mediation of banks and on good terms.
On the other hand, this type of lending may not be suitable for you due to certain circumstances, which often happens with any type of lending. This is not a reason for depression, you just need to find your way to get the financial support that you need.
What if you have bad credit?
After the global financial crises, many good people have such a credit situation that they have difficulty getting loans. If you have such a situation, then you have alternatives to p2p lending.
We specialize in credit, loans and personal finance, so we can help you find your lending option. Fill out the loan application form on our website and get back the options that are available to you from different lenders.
There are quite a few online lenders who work with bad credit. Start your search today and get a loan in the coming days. Read our financial blog to learn more about credit and personal finance management.