If you are planning to pursue your college education, it is advisable to know about peer to peer lending first. This type of lending has become quite popular as it allows students to get the money they need to finish their college education without depending on any one lender. Peer to peer lending review refers to a group of borrowers who jointly pool funds for a loan. The loans that come from this type of lending can be secured or unsecured depending upon the borrower’s credit history and income. It is quite simple to apply for such a loan as you do not have to submit collateral.
The main benefit of borrowers borrowing from a peer to peer lending site is that the interest rate offered here is usually a bit lower than offered by banks. Another advantage of these loans is that the interest rate offered is always two percent lower than that of the federal student loans. This is because lenders do not charge any processing fees when these loans are granted. Furthermore, borrowers find it very convenient as there are no documents to process and no credit checks that the borrowers need to go through.
Investors are attracted to this type of lending because of the flexibility of the loans. This enables investors to invest in small businesses that cannot be afforded by large corporate bodies. There are plenty of peer to peer loan sites that offer different types of loans to borrowers; therefore, it is easy to locate an affordable type of loan. These loans also come with variable interest rates that are flexible and allow investors to borrow small amounts of money over a long period of time.
One of the major benefits of using this lending platform is that you do not need to have good credit history or a cosigner. In fact, if you meet the criteria, you can get a cash advance immediately. In order to qualify for the loans, you should have a steady income from a job or a business. If you have other assets such as stocks, bonds, savings accounts or mutual funds, you can also apply for a line of credit.
A few disadvantages of the peer to peer lending sites are that borrowers have to pay a high fee compared to bank loans and credit cards. The repayment term is usually a lot shorter compared to bank loans. Also, there are various fees charged for using the service and some of these fees are quite high. This is why it is important to compare the fees of different lenders before you actually get one.
As you can see, there are pros and cons of using peer to peer lending services. While this type of service has its own benefits and advantages, it is also important to carefully compare different peer to peer lending sites to get the best rates available on loans. It is also important to understand that using this type of service does not erase your responsibility to repay your debts. It just allows you to take advantage of a very flexible financial opportunity at a lower cost than banks. You should also keep in mind that the borrower needs to make his payments promptly or he may suffer bad credit history, which will affect his ability to get a loan in the future.