For individuals who are going through some especially rough times trying to meet their financial obligations or for those emergency situations that will require quick cash, having bad credit will almost always disqualify you already from seeking financial assistance from banks and other lending institutions.
Banks will require your credit score to be at least in the 700s. Any credit score lower than that significantly reduces your chances of getting your loans approved. And while financial experts do not necessarily look at peer-to-peer lending with the same kind of respect that they afford banks and other similar institutions, Americans all over the nation are finding the convenience as well as the usefulness of P2P lenders in mitigating the effects of their financial quagmire.
Here are the reasons why P2P loans are effectively becoming the good answer to a bad credit:
Lenders are Real People
One of the essential characteristics of peer to peer lending is that it can be best viewed as borrowing money from a trusted friend with very minimal easy requirements. Compared to bank loans, P2P loans are sourced from people who actually understand your predicament, much like what you would do for a friend in need. Because lenders are real people and they are putting their trust in you that you will repay them back their money, you will feel a much more personalized feel to the loan transaction.
Even if you did have a bad credit, there are many ways to find out the real story behind your predicament so that you will have greater chances of getting a P2P loan. In bank loans, they will just look at your credit score and once you don’t meet the minimum, you are out.
Lower Interest Rates
Compared to bank loans, interest rates on P2P loans are considerably lower. Other unsecured personal loans like payday loans can sometimes charge you up to 60 percent in interest.
Quicker Processing Means Faster Cash
As all transactions are done online, the processing of your application is generally faster. Bank loans will often involve a lot of paperwork that needs to be transmitted across different departments for that all-important signature. And if there are any discrepancies later on, you are back to square one. Most P2P lenders can facilitate loan requests in as fast as 7 to 10 days, depending on how fast you will be able to provide them with the requirements.
No Prepayment Penalty
Because the loan was made out of compassion for your plight, the lenders will not charge you one bit if you happen to repay them earlier than your scheduled repayment. While this can already be considered as a loss to the lenders, they will never mind it because they know that they were able to help someone when he needed it most.
Besides, your repaying them earlier says something about you, making you a favorable candidate for lenders to support should you require a P2P loan again.
So if you have a bad credit and you are in dire need of cash, hope is not lost. You still have peers online who can provide you with the financial help that you need.