How To Get A Loan With Peer-to-Peer Lending
Most banks have cut back the amount of money they’ve been loaning to customers who don’t have an excellent credit rating. We have all needed a quick bit of money from time to time and it is no surprise that borrowing the money is one of the most popular ways to get money quickly. With the financial meltdown that has hit this country in the past 6 months it has been much more challenging to get an direct loan from a bank.
We’re used to going to banks for all our lending needs today, but the act of borrowing money has existed long before there were banks. Before official lending institutions existed there were wealthy patrons who would lend out money to people who wanted it. When money were first created you’d have to borrow money from several rich people if you wanted a large sum of money for any reason. The act of lending money a simple process, but it was complex to administer loans to a lot of different people. In the past many people sometimes loaned money to a poor individual. Eventually, these wealthy people put their money together and made a financial institution which would handle the details of loaning and collecting money on its own.
There is now a method of borrowing cash no longer involves a bank at all. With the advent of the internet there’s been a shift in the way people are able to borrow money and loan it to others. The most recent method of borrowing money more closely resembles how money lending was handled in the past: social lending between two people.
This new way of lending money is called “peer-to-peer” lending or crowd sourced financing. Peer-to-Peer lending lets multiple parties lend their money to a solitary individuals or many of different people. In a crowd sourced lending arrangement a single person may end up borrowing money from hundreds of different people who have money to loan out. If you need to borrow $2000 for a home upgrade then you might really end with one single loan that’s funded by several dozen different people! So you could borrow cash for a small home upgrade from a peer-to-peer lender and actually be getting cash from hundreds of different lenders.
Loans made with a peer-to-peer lending institution can be relatively small or moderately big with most offering a max amount of $25,000 and a minimum amount of $1,000. You do usually have to have a pretty good credit score with a certain debt-to-income balance to qualify for many of these loans. Clearly, this sort of borrowing isn’t good for every situation. Peer-to-peer lending is often a useful way to borrow cash for expanding a business, purchasing a used car, paying down student loans or even financing a wedding or big event. One of the most common uses of peer-to-peer loans is home improvements.