Signature loans can be difficult to obtain. The lower your credit score is, the less likely it will be that you will be able to secure a loan. In today’s difficult economic climate, lenders are even more cautious about who they are will to lend money to. As an alternative to traditional banks and other lenders, more and more people are looking into a new type of lending — peer-to-peer lending, also known as social lending. Peer to peer lending is made up of individuals and small businesses that are willing to make loans to other individuals and other businesses. In today’s market place where lenders are much less willing to loan money to people who they feel are high credit risks. This field is growing rapidly. As we mentioned previously, the Securities and Exchange Commission (SEC) has increased the regulations upon the social lending companies.
Peer-to-peer Lending With Good Credit
Borrowers who have a good to excellent credit score are able to apply for, and are likely secure personal loans from peer to peer lending sites for $1,000, $5,000 or even more, if their credit scores are good enough. Some of these peer to peer lending companies even offer up to $25,000 or $30,000. Besides being able to secure a loan when other lenders might not be willing to loan you money, there is another advantage. You may be able to secure the loan through the social lending site with a better interest rate than those that are offered by traditional lenders. As with any signature loans, peer-to-peer loans may be used for any reason whatsoever.
Typically, people use loans from peer to peer lending networks for debt consolidation, home appliances, student loans, or for any other reason. There is no limitation on how you use the money. There is a catch, isn’t there always…. Borrowers at most peer-to-peer lending networks can not have a bad credit rating if they are trying to secure financing via peer-to-peer lenders. To borrow money from one or more of the numerous lenders, the borrower must have a good credit rating. Borrowers need to have a credit score of at least 660. Do you know your credit score? If you are fortunate enough to secure such a loan, you will need to repay it by making payments for the next 36 months or 60 months, depending upon how long your peer to peer lending loan is for.
The proceeds from loans that are made through peer to peer lending networks may be used for most any reason. If you borrow money, of course, you need to make sure and repay your loan in a timely manner. This will not only get you the cash that you need, but it will also improve your credit rating at the same time. This will allow you to get more loans in the future, be able to borrow more money than you are borrowing now from your current peer to peer lending loan, and be able to get these new loans at better (lower) interest rates. This means that you future loans will cost less. as with all other peer-to-peer lending networks, they are becoming fantastic alternatives to traditional lenders, especially for those who those who are seeking signature loans.
- Charge you late fees
- Send your account to a collection agency
- Report your information to a consumer reporting agency, which may negatively affect your credit score
- Offer to renew, extend or refinance your loan, which may cause you to incur additional fees, charges and interest