How to Get a Personal Loan with Bad Credit

Bad Credit  - Personal Loan

Bad credit, no credit – Peer to Peer Lending could be the answer. Down on their luck and needing a hand up – too many people in America and elsewhere know this story. For people who are trapped in day-to-day expenses, unable to implement new ideas or to consolidate existing debts into a manageable package — even though they are earning and doing the best they can to pay their bills – there is hope.

Bank loans can require credit scores of 700 or more. One financial slow-down, such as a lost job, a bad financial investment, an accident or a medical emergency can literally kill credit ratings – even for responsible people who do everything they can to take care of their debts responsibly. Peer-to-peer lending can offer a way back up the ladder. As for those folks who sowed some wild oats, and made some bad financial choices, peer-to-peer lending can offer an avenue to turn over a new leaf and get onto a better track.

7 reasons to apply for a Peer to Peer Loan

P2P lending has definitely become a new alternative lending method in America. Because they are not established lending institutions, these companies can afford to run a leaner model of financing. Instead of traditional interest on the loans, they assess a pre-agreed-upon fee, which might be assessed up front or charged yearly. This cuts down on the amount of record keeping required to service the loan.

  • What this means for Borrowers:

    Well, first of all, less expense for the lender means more money to lend – and fewer requirements for borrowers. Applicants can have a credit score as low as 640, and be able get a loan. Obviously, borrowers still have to meet some conditions – such as having the means through which to meet their obligations. But it does offer hope to those with less than perfect credit. They can actually get a loan; they can take care of their obligations. It will give them a much needed boost to get on with their lives in a positive fashion.

    Second, peer-to-peer lending companies often have resources that allow them to assess borrowers’ credentials differently. They are able to review thousands of credit records, giving the better insight into whether or not a person will be able to repay a loan. With this added input, they can better judge whether or not an individual might be a good credit risk. That, coupled with running leaner, allows them to approve more loans than banks or similar lending institutions.

    Third, borrowers can get enormously better interest rates from P2P lending than they can from a payday loan. People who are in serious need of money, and have bad credit, might resort to lenders who charge rates as high as 60% in order to fulfill their personal obligations. This means that they are sacrificing a vital portion of an income that is already compromised. Peer-to-peer lending can enable them to get a loan that will not instantly devour their budget with high interest and add-on fees.

    Fourth, peer-to-peer lenders can afford to lend greater amounts than banks or credit unions. Where a credit union might have a limit as low as $15,000 for individual loans, P2P lenders might be able to offer as much as $35,000. This can be a blessing for people who have run themselves aground with credit cards or that need to refinance their home or their vehicle, or that have had an unexpected medical expense. With the cost of new vehicles and the obstacles placed on home loans today, as well as the high cost of medical care, this might mean the difference between success and disaster for many families today.

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    Fifth, you can get your money quicker. Bank loans, and even loans from credit unions, require a lot of paper work. There can be waiting periods – and that doesn’t even take into account that heart-stopping period while waiting to learn if credit is approved or not. If the situation is a medical emergency or the ability to pay enough bills to keep a home up and running, time can be a vital consideration. It might also be an immediate answer to a business opportunity that would slip through the borrower’s fingers without immediate funding. Peer-to-peer lending can eliminate a lot of the time-consuming processes that can hold up funding for weeks.

    Sixth, borrowers can pay off early without a shred of penalty. Big lenders want borrowers to keep on paying – because as long as they have a respectable balance borrowed, the lender is receiving interest on those funds – so they charge huge pre-payment fees to recoup the interest they had hoped to earn. Paying off without penalty means money in the borrower’s pocket in the form of less interest and fewer fees. This is especially good news for borrowers who need the funds to close on a profitable business deal, because upon success, they can take advantage of a short turn-around of profit. It is also good news for intelligent individuals who put their hard work into paying off their bills – and love to see those balances reach zero.

    Seventh, peer-to-peer lending comes from real people, not from a faceless corporation. Knowing that failure to pay could result in shortages for the lender can promote greater responsibility in the borrower when it comes time to make those payments. Making responsible payments helps the lender, and helps the general economy as it keeps that money flowing through the system.

    Those are seven great reasons for Peer to Peer lending – but the benefits don’t stop there. Many people get into trouble financially when they are running just a little too close to the edge of their spending ability. Peer-to-peer lending can offer them a way to consolidate their credit, so that they can make one lump sum payment instead of being locked into multiple, high-interest payments.

    Peer to Peer Lending offers Hope

    It offers hope to people who otherwise must struggle under a burden of debt, with their credit rating becoming lower and lower as they juggle payments in an effort to meet their obligations. Peer-to-peer lending can actually help them to preserve their credit rating because it enables them to responsibly manage their debt. This is good news for everyone.

    Spread the Word

    So why don’t more people take advantage of P2P lending? Mostly, because people just don’t know about it. As a modern concept, it started with a UK company in 2005. It came to the US the following year. That makes peer-to-peer lending a scant ten years old – which means it is truly a baby compared to other financial institutions. But top peer to peer lending websites offer reliable services through responsible lending platforms. Not knowing about this resource is truly a shame because it can be rescue for people with no credit, bad credit or a need for quick cash. While borrowers do need to keep in mind that these are truly loans and that they do need to be repaid, this could be an answer to so many financial problems across America and around the world.

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