Best Peer to Peer Lending Company Sites For Bad to Good Credit Score
P2P lending have grown since the arrival of digital technology, due to its various advantages offered to both investors and borrowers. The main advantages to borrowers include:
- Lower interest rates on average compare to traditional banks for credit cards or installment loans
- Easy to use online platforms
- Transparency and clearly disclosed loan terms
- Instant decision making with the use of technology to assess quickly and assign risk grades and interest rates to applicants.
Are you struggling to pay bills and other debt. Need a quick cash for personal use or due to an unforeseen medical emergency, there are many people who need to get their hands on some cash. But they simply don’t have the credit score to be approved for a traditional personal loan from the bank.
- Bad Credit Ok
- Peer to Peer Leding from $100 to $35,000
- Must have a permanent source of income
- Income must be Verifiable.
- APR depends on your state, credit score, and monthly income.
- No Prepayment penalty
- Terms: 3 months to 72 months.
Yes, it’s true- individuals who have bad credit typically have a hard time finding solutions for their financial needs. After all, a traditional bank loan typically requires good or excellent credit to lend money. So, if someone has bad credit and needs to borrow money to pay some bills or for immediate personal use. What options do they have?
Peer to Peer Lending Bad Credit Approval If you meet this requirements below:
The good news is People with bad credit can borrow money online, having permanent monthly income and can meet the lender’s criteria:
What is Peer to Peer Lending?
Digital (or P2P Loans) lending a marketplace for both investors and borrowers. P2P investors offer unsecured personal loan for borrowers who meet their requirements with a APR from 6% to 36%. The investors get the chance to grow their money quicker than they would in a traditional savings account. Consumers or borrowers can apply for a personal loan from the comfort of their place to get quick access to the loan they need.
Reasons to Apply for a Peer to Peer Loan
Following are seven reasons why peer to peer loans are good for those individuals who have less than perfect credit scores.
Peer to Peer Loans: Less procedure= Instant Approval
This digital lending made life easy when you need a personal loan. Whole process and procedure is done online. You can apply from anywhere within USA. Simple procedure and low documents to get a loan.
Fill in your loan application and submit. Keep all the required information like personal and employment details while filling the online loan application.
Once you submit. It takes few minutes to hour to get the approval. It will be instant approval if you are eligible for a personal loan.
Peer to Peer Loans: Online Assessments = Higher Approvals
There are many consumers out there who do deserve a credit line, but their bank doesn’t give them a loan because the bank doesn’t have access to all of their information. Instead, the consumer is told that he has “bad” credit- but this is typically said by those banks who are not able to see the full picture. In contrast, the Peer to Peer Lending Companies are able to judge more accurately whether or not a person deserves a loan. This is because they are able to access a variety of data from a variety of third-party resources so that they can build the consumer’s profile. These companies do this while also taking a look at the rates of success of past loans, which gives them the ability to approve loans for those who would be denied elsewhere.
They use your Social security number to check the database to know your credit history. Which is a soft inquiry. It won’t affect your credit score.
Peer to Peer Loans: Lower Interest Rates (starts at 6% to 36%)
Unfortunately, the average consumer that is denied for a bank loan has very few other options available to them. Most of the time, the only option is a Payday Loan, but these types of “cash-advance” options typically have very high interest rates- that is, over 60 percent. This type of loan is so predatory and bad that some states, such as Georgia, have outlawed them. On the other hand, Peer to Peer Lending Companies will issue loans to individuals with rates that are much more reasonable than, as low as 6 percent.
Peer to Peer Loans: Borrow up to $35,000 unsecured personal loan:
Many times, there is a cap on how much your local bank or credit union can offer you. Which can be a problem! Many times, people need to pay off large debts such as medical debts or credit card debts and have difficulty finding a loan large enough to cover it. However, the P2P Loan Companies offer much higher loan amounts- and in the next few years, could be rising.
Peer to Peer Loans: Quicker Access to Cash
When a consumer applies for a loan at his local bank or credit union, the process will be more then a week. The paperwork needs to be faxed and there are phone calls that need to be made. However, the Peer to Peer Lending companies work almost entirely online. This means that the process can be done in a lot less time. Individuals who apply for a loan through Peer to Peer Loan will have their funds within 4 working days.
Peer to Peer Loans: No Penalties for Paying Early.
Other evidence supporting the fact that the Peer to Peer Loan Companies are more efficient and cost less is the fact that the borrower will be allowed to pay off their loan early without incurring additional fees. This means the Peer to Peer Lender loses some interest, it’s a major plus for the consumer. When it comes to the traditional loans at banks, the fee for paying early can be several hundred dollars.
Peer to Peer Lending: Come from Your Peers Across the Country
While this is a great reason why P2P Loans are good solution to the financial woes of a consumer. It seems to have gained its appeal in recent years. Yes, the Peer to Peer loans are funded by individual investors across the country. As a borrower, chances are that you feel little to no connection to a bank offering a loan. The Peer to Peer Loans are typically funded by several individual investors working together. This typically gives the consumer a bit of dignity and responsibility regarding the cash they have been given.
4 Reasons to Avoid Peer to Peer Loans
While it’s true that all of the above reasons indicate that a Peer to Peer loan is a good alternative. There are some disadvantages that can be a hindrance to these advantages. Following are the four common disadvantages to this type of lending. That can help you to determine if this is a good solution for you or not.
Peer to Peer Loans: May Not Get Approved
Since these types of loans are run by “private” business people, you may or may not get approval if you have very poor credit history with high debt to income ratio.
Peer to Peer Loans: Interest Rates May go High. [Unsecured loan]
We mentioned above how the Peer to Peer Loans often come along with much lower interest rates. But higher then the secured loans. Let’s take a look at the other side of that coin. In some cases, due to the fact that these types of loans are not regulated or backed by financial institutions, there’s a chance that you’ll have a much higher interest rate. The individual investors or companies that are loaning you the money might possibly place a higher rate on your loan because of your low credit score. May offer you with cash advance loans. Therefore, if you can handle the potentially higher interest, this may be a good option for you for short term.
Peer to Peer Loans: Lenders are Not Known
One of the major disadvantages of Peer to Peer Loan is, you don’t know the lenders you are borrowing from. You don’t know anything about them and the financial situation they have found themselves in. However, when it comes to borrowing from a financial institution, you can do your own research. And learn more about their history, financial stability, and almost anything else you can think of. Borrowing from investors that you don’t know anything about is a bigger risk. And again, you want to make sure you take the time to read the documents before you sign them.
Peer to Peer Lending Bad Credit:
For those who have found themselves in a bad credit type of situation, there is hope. The Peer to Peer Lending is beginning to approve bad credit loans. Applicants who have good permanent income with stable work history and low debt to income often found themselves getting approved for personal loans. However, with the P2P loans, they can consolidate their debt into one payment- typically with a lower interest rate.
Check this inforgraphic on p2p lending how it works:
The borrowers often has to jump over many hurdles to get the loans that they need. Peer to peer lending is one of the easiest forms of getting the money that you may need. Use it to purchase new equipment or renovate your home, Vacation, debt consolidation that it will better suite your needs.
The traditional banks often flatly refuse to give loan for bad credit borrowers. Unless they possess the collateral to back the loan.