Whether you need a viable loan source to pay off your current classes or ones that you’re still paying for long after graduation, you may want to consider a peer-to-peer loan.
A peer-to-peer loan is a privately-funded loan that has variable interest rates, often dependent on your credit score. If you have a relatively good score, a peer-to-peer loan can provide interest rates that are well below banks and other lending firms. And though you may not be able to borrow as much money as if you went to a bank, a peer loan can help you get out of debt faster and may be easier than if you sign up with a corporate institution.
So if you’re mulling over your options for repaying student debt, here are the advantages a peer-to-peer loan can provide over traditional lending firms.
The Process Is Straightforward
If you work through a lending intermediary, like Prosper, you get a streamlined way of connecting with a potential investor based on your credit information, employment status, and payment needs. Companies online that specialize in peer-to-peer or alternative finance want to make the process of securing a loan fast, easy, and honest, so you know what you’re getting into before you begin. You simply fill out information regarding your loan request and personal data, which will assign you with a risk assessment and interest rate, and bidding will begin from private lenders to provide you with the funds you need. For payments and concerns, you don’t work with the lender directly, but through the online intermediary.
Rates Fit Better
Because you’re assessed for risk and given a particular interest rate based on your needs and background, you don’t get a one-size-fits-all loan in return. If you have a poor credit history, have applied for multiple sources of credit or loans recently, or if you don’t have exemplary earnings, rates may still be as high as if you were to go to a bank. But if you have a decent history, source of income, and little or no lending background, a peer-to-peer loan will give you a better rate and longer durations of payment.
People Want To Help
If you’ve been declined in the past or just would like a smaller loan with reasonable interest rates, your faith may be restored by the process of peer-to-peer loans. Peer-to-peer loans are profit-based, so there’s definitely a reason to take on your debt for a short while. But there are also private lenders that participate in peer-to-peer lending to help others get out from debt that continues to amass and the exorbitant interest rates that come through using corporate lenders. Private lending also gives you a connection to an online community, so with borrowing, you may feel a greater obligation to participate in responsible payment processing instead of feeling like you’re enslaved to a financial giant.
For more information about peer to peer loans, contact a company like Modest Money.