Have you ever heard of a peer-to-peer loan? They are a unique type of lending, unlike your average bank loan.
Also known as microloans, P2P loans are funded directly by investors instead of a financial institution. That makes the lending process quite different from traditional lending, especially during the approval process. Peer-to-peer lending is transforming the ways of getting money amongst borrowers, creating more opportunities to get financial help when in need.
Defining Peer-to-peer Lending
As mentioned above, peer-to-peer loans are different because they are funded directly by investors instead of a typical financial institution.
One aspect of peer-to-peer loans is that since they do not have the same regulations as other loans, there are less stringent credit requirements. That offers better lending opportunities to borrowers because no matter the credit score, everyone can find an investor to work with them.
With peer-to-peer lending, you can directly work with investors to get your loan. If you have a low credit score, you can explain the reason and work with them to set up favorable terms for them so you can still get your loan. If you have a low credit score and need a loan fast with little to no issue, peer-to-peer lending is a viable option.
Peer-to-peer loans are popular for smaller amounts bank loans don’t loan out. You can borrow as little as $100 or even $2,000, making it easy to get the fast cash you need quickly.
Most of the time, banks will not loan any amount below $5,000 because it will take the same amount of work to set up a loan that small as a $100,000 loan. That is why microlending is a great way to borrow small loans.
Microlending is also unique since it takes place online and not through a financial institution where you need to go in person. There are platforms where peer-to-peer lending takes place, making it easier for borrowers to connect with investors. When you are looking for an investor to fund your loan, a trusted P2P lending platform is where you will find them.
Most peer-to-peer platforms are easy to use where you can create your profile, explain why you need the loan, and your additional borrowing criteria. You can look at what investors are looking for in a borrower and see if your criteria match, streamlining your chance to get your loan.
Microloans give you a new chance to receive the funding you need on a quick timeline.
Why Peer-to-peer Loans Benefit You
Peer-to-peer loans offer different advantages that help you throughout the borrowing process.
Direct Lending
When you choose to take out a microloan, you get a direct source to the lender and therefore have a more direct lending experience. If you borrow money from a bank, the experience is not very personal; they only care if you match their criteria. If your credit score is too low or they do not like your past spending habits, you will have to find another financing option.
Unfortunately, most banks will not lend to you, especially if you are trying to turn your finances around.
However, by using peer-to-peer lending, you get a newfound opportunity to obtain a microloan! You can work with lenders that understand your situation and help you with money to get back on track. When paying them back on time, you can even boost your credit score, helping you become an even better borrower.
Better Fees
Microloan fees are more accommodating and flexible. A loan usually bases all of its rates and fees on the federal reserve and the current market, which is not the case with a microloan. Your investor will set the fees based on you as a borrower and your loan amount. That makes the loan fees better and more accommodative to your borrowing situation.
Instead of getting high fees on a large loan, you can get the small amount you need to borrow and have a better borrowing experience.
Better Lenders
Borrowing loans through peer-to-peer lending can connect you with better lenders, allowing you to work with them to get the loan you need. That helps you more than a bank because you are not just a faceless borrower but a person in need of help.
Also, these lenders are more personal since their funds are backing your microloan. They will connect with you more since you are responsible for paying them back, and they need you to have a good relationship with them.
Microloans offer excellent opportunities to borrow money online from a network of lenders.
Reasons to Use Peer-to-peer Lending
Even with all the benefits it brings, peer-to-peer lending is not the most common option for borrowing money and might make you wary of trying it.
Loans from banks and numerous financial institutions are typical and relatively the same in every circumstance. You can expect the same outcome with them, making them comfortable for you to use when you need a loan. However, microloans provide more unique opportunities you can use to your advantage in comparison to bank loans.
For example, when you borrow a bank loan, you have no control over your approval since you are just another face that needs a loan. That makes the approval process stressful and lengthy since you probably will not have direct contact with whoever is deciding your approval.
On the other hand, you will work directly with the investor who approves you when borrowing a microloan. This aspect of peer-to-peer lending will help you receive faster approval with funds deposited into your bank account quicker than most loans.
Instead of being turned away for a loan, you can create a new opportunity to receive the money you need without jumping through hoops for a bank. Getting the money you need should not be difficult, and you deserve to get help for your situation.
Next time you need a small loan quickly, consider peer-to-peer lending!
Get a Peer-to-peer loan Today!
If you are interested in borrowing a microloan, Lendee is the perfect platform to get you started!
When you use Lendee, you can access a network of investors to help you financially. Microlending makes borrowing easy no matter what your credit score is.
The unique thing with Lendee is that the loans range from $100 to $2,000, with payment terms ranging from 3 months to a year. Also, Lendee has its scoring system that incorporates your credit score, spending habits, and response times to show investors what kind of a borrower you are.
Lendee ensures to make your peer-to-peer lending experience seamless. Check it out today by downloading the app now.
