Peer to Peer Lenders for Individual Borrowers

by admin on February 10, 2014

Banks and finance companies offer secured and unsecured loans to new and regular customers. The fees, penalties, closing costs, and interest rate are important factors. Attractive deals are usually offered to customers with a stable income and excellent credit. Borrowers can choose from different options, including second home, vehicle, and other loans. Online banks offer low rate personal loans and attractive deals because they save on staff, rent, and utilities. Secured loans require collateral such as real estate property, jewelry, antiques, collectibles, etc. Mortgages are the most common type of secured financing. Borrowers can choose from different types of financing, including adjustable rate, fixed term, and conventional mortgages. Borrowers can choose from high ratio and conventional mortgages and bridge financing. When choosing a secured loan, it is important to consider factors such as acceptable types of collateral, the down payment, variable vs. fixed interest rate, and others. Insurance is not required if you make a sizeable down payment. Some types of secured loans require little money down, for example, high ratio loans and some federal loans.

Financial institutions also offer reverse and foreign currency mortgages. Subprime mortgages are offered to borrowers with a less-than-perfect credit score. Other types of financing include home equity loans, cash advances, and unsecured low rate loans.

High Interest Rate Loans

Payday loans are one solution for borrowers who have exhausted all other options. The problem with payday loans is that some lenders tend to ignore legal restrictions. Borrowers who are salaried employees usually qualify. Some lenders allow refinancing and loan renewal. The fact that many applicants have tarnished credit means that lenders take more risk. The default rate is between 10 and 20 percent, which means that lenders take more risk compared to banks and credit unions. The interest rate is very high, with some lenders offering an APR of close to 400 percent. Other options for debt-ridden borrowers include cash advances, loans from friends and family, and peer to peer platforms. Private lenders, for example, offer loans to business and individual borrowers. This is one alternative to banks and credit unions whereby online platforms serve as an intermediary between borrowers and lenders. According to platform owners, the default rate is low meaning that individual lenders take less risk. Cash advance loans and fax loans are also offered.

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