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| Rejected Down By Banks, Try Peer-to-Peer Lending |
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| Written by Garrison Galbraithe |
| Tuesday, 07 April 2009 13:09 |
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Borrowing money during difficult economic times can be trying. Banks do not want to give people money for fear that they will not be able to repay their loans. For people or small businesses that have a good credit history, this can be very frustrating. You may need some extra money to for a special occasion, or perhaps your business may be in a growth mode and you want to open an additional location. If the banks are unwilling to loan you money, where are you going to get the money that you need, right now? If you are having a difficult time securing a loan through a bank or other lending institution, you might want to consider peer-to-peer lending. Peer-to-peer lending sites are a relatively new form of lending. There are several of these social lending networks. At these websites, you place a request to borrow money, and provided that your credit score is adequate, you will be able to borrow money from people or other small businesses, just like you. Why would you use one of these peer-to-peer lending sites? For starters, you are more apt to have your loan filled at a social lending website than from a traditional lender, like a bank. Banks may be less inclined to loan you money than other individuals might be. Both borrowers and lenders can take advantage of better lending terms at social lending sites. The interest rate that the borrower will pay for their loan is likely going to be lower at a social lending site than at a bank. For those people who are lending money, they will likely be able to get more favorable terms lending money to other individuals than they will by just keeping the money in a certificate of deposit in a bank. Of course, there is some added risk for the lender, as the borrower is more likely to default on the loan than the bank is to not pay the interest and principal on your FDIC deposits. To get a loan from a social lending site, you need to have a good or excellent credit score. If you have an excellent credit score, you can probably obtain your needed financing from a bank or other traditional lending institution. For those with only a good credit score, you may have a harder time getting a loan from a bank. To borrow money through a social lending site, you need a FICO score of at least 640. Some of the peer-to-peer lenders require an even higher score. Social lending is a great option for those people with good or excellent credit. If you have a bad credit score, you will likely not be able to obtain such a loan. There are a growing number of peer-to-peer lending sites. Zopa is one of the bigger players in this marketplace. They operate in the US and in the UK. Other big players in this field in the USA include Lending Club and Prosper. If you are having a tough time securing financing through a bank, peer-to-peer lending websites are a great alternative. There are more and more of these sites starting up everyday. Check the internet for reviews. Using these sites offers you a greater chance of getting a loan, and at more favorable terms. About the Author: Garrison Galbraithe, who has been passionate about personal financial matters for more than three decades, has written a practical guide to peer-to-peer lenders. You can obtain information about several borrowing options, including signature loans at his site. You can get a unique content version of this article from the Uber Article Directory. Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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