In these difficult economic times we are undergoing now, you have no doubt seen that lenders are tightening up on the amount of money, if any, they will lend. If you have a bad credit history you are in trouble, but if you have a good credit rating but a lot of debt you may also be in trouble when you want to borrow money.
If you have looked into interest rates lately you will have seen an increase in rates. For the average consumer looking to borrow or apply for a line of credit the interest rate remains high. Some banks advertise low interest rates but these particular rates are reserved for the wealthy or people with a perfect credit score.
So what is the average consumer to do if they need to borrow money? There has been a trend of lending networks forming, to help with this growing need. These networks are called many things like person to person lending, social lending and P2P lending networks.
Lending Networks are a safe and legal way for individuals to lend each other money at competitive interest rates that one may not normally qualify for. There has always been a huge risk of families and friendships being torn apart from lending money to one another when trying to help in a time of need. Lending networks eliminates this possibility.
The best part about P2P lending is that you do not need to worry about high interest rates at all; they are very low in this type of borrowing. But lending money to a stranger? Doesn't seem safe at all, isn't it? Well, here is an overview of its execution.
A potential borrower must join a social lending website, which there are many out there these days. The borrower then must submit personal and financial information, much like they would at a normal bank. This information is then used for legal and credit reasons but you will never meet the lender of the transaction.
The process is very simple; you put your monetary need on the lending network site and submit a reason for the loan. Your reasoning for money is up to you; it can be from paying off debts to needing money for a business venture.
It works differently for any lender on this network. Once you have joined in as a lender, you have to provide your financial details and then the amounts you wish to lend have to be transferred to this network. This money is put into the escrow so as to lend it to a suitable borrower. You can then compete with other lenders in this network by bidding on borrowers, depending on the interest rates. You need not lend the whole amount to one borrower. It is any time a better idea to distribute the amount in more than one borrower; this way you are not at a risk of losing out on your money.
If you have looked into interest rates lately you will have seen an increase in rates. For the average consumer looking to borrow or apply for a line of credit the interest rate remains high. Some banks advertise low interest rates but these particular rates are reserved for the wealthy or people with a perfect credit score.
So what is the average consumer to do if they need to borrow money? There has been a trend of lending networks forming, to help with this growing need. These networks are called many things like person to person lending, social lending and P2P lending networks.
Lending Networks are a safe and legal way for individuals to lend each other money at competitive interest rates that one may not normally qualify for. There has always been a huge risk of families and friendships being torn apart from lending money to one another when trying to help in a time of need. Lending networks eliminates this possibility.
The best part about P2P lending is that you do not need to worry about high interest rates at all; they are very low in this type of borrowing. But lending money to a stranger? Doesn't seem safe at all, isn't it? Well, here is an overview of its execution.
A potential borrower must join a social lending website, which there are many out there these days. The borrower then must submit personal and financial information, much like they would at a normal bank. This information is then used for legal and credit reasons but you will never meet the lender of the transaction.
The process is very simple; you put your monetary need on the lending network site and submit a reason for the loan. Your reasoning for money is up to you; it can be from paying off debts to needing money for a business venture.
It works differently for any lender on this network. Once you have joined in as a lender, you have to provide your financial details and then the amounts you wish to lend have to be transferred to this network. This money is put into the escrow so as to lend it to a suitable borrower. You can then compete with other lenders in this network by bidding on borrowers, depending on the interest rates. You need not lend the whole amount to one borrower. It is any time a better idea to distribute the amount in more than one borrower; this way you are not at a risk of losing out on your money.
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