How Can You Borrow Money Through a Peer to Peer Lending Platform
Borrowing money through a peer to peer lender is different than applying for a loan from the bank. This is because the funding is from individual investors. Individual investors are not as strict as bank when they review your application. They are easier to be persuaded to give you a favorable lending term compared to the banks.
he first step is to fill in the application form at the P2P site to go through a soft credit check. The soft credit check can determine whether you are preapproved for the loan. You don’t have to worry about soft credit check as it won’t have any effect on your credit score. If you are preapproved, they will let you know through email and it is up to you to continue with the actual loan application. The actual loan application will require you to provide information on why you intend to take out the loan.
It is when you submit the actual loan application that the lender perform a hard credit check and assign a loan grade. The loan grade gives the individual investors some ideas on how much risk you are worth to them. You can list your loan on the p2p platform when you are approved. In the listing, you can state your requirements for example the loan amount, and the interest rate you want to pay. You can take this opportunity to write a creative listing to get the lender to lend the money to you at a low rate.
Lenders can bid on the amount that they are willing to lend. You can have one or more lenders funding the single loan. When funding reaches a satisfactory amount, the loan will be close and the amount will be transferred to your account in 1 – 2 weeks. Prepayment is allowed on a p2p loan. If you prepay the loan, you can avoid paying interest fees.
The advantage of a p2p loan is that it can get approved faster than a traditional bank loan. For most borrowers, it takes less than 1 week for their p2p loan to get approved. Many people are using low interest p2p loan to consolidate credit card debts with high interest fees. It can help you to manage your finance when you are facing some extra expenses in the near future.
It is safe to take out a loan on a p2p platform because all your sensitive information are kept private on an encrypted browser session. The lender do not know your name or other personal information as the p2p platform won’t reveal these information to them. This allows you to take out a loan on a p2p platform as an anonymous borrower. All your communications with the lenders are also protected on the p2p platform.