Sites that Offer Peer to Peer Lending with Bad Credit
Peer to peer lending, also called P2P lending or crowdlending, is the process of lending cash to individuals or businesses via online services that directly match lenders with borrowers. Lenders investing in P2P lending often get higher returns compared to traditional lending because they have low overhead for transactions take place online. Borrowers on the other hand, benefit from lower interest rates. P2P loans are unsecured personal loans but large amounts are also lent to businesses. For people struggling to get a loan with a bad credit, peer to peer lending with bad credit is possible; you just have to look for the best P2P platforms that offer them. To make things easier for you, they have been listed in this review.
Peerform is more liberal in credit requirements among other peer-to-peer lenders. The lender considers loan applicants with credit ratings of as low as 600. It offers loans of up to $25,000. Their website presents the APRs and fees in detail. If you need money quickly, please note that the loan can take up to two weeks to be funded, and like all P2P lending, there is no guarantee that the loan will be fully funded by the investor. Certain fees also apply with Peerform loans, including origination fee, which equates to up to 5% of the loan. However, if you have a mid-tier credit, you can enjoy low APRs of 7.12% to 28.09%.
Prosper is a major peer-to-peer lending site. In 2014 alone, it was able to raise $70 million in capital. It offers different types of personal loans and a low beginning APR. For those looking for peer to peer lending with bad credit, Prosper offers lower minimum credit score than its competitors. Most of its employers are investors as well, and it offers a program wherein financial professionals can get involved. APR starts at 5.99% for best borrowers. You can simply choose the loan amount, the purpose and post a listing. Investors will then review the listings and invest in those that meet their criteria. Once process is complete, you can pay a fixed amount every month. The good news is, Prosper approves loans for applicants with FICO credit scores of as low as 640.
Avant is a P2P lending site that is truly friendly for people with bad credit scores. It accepts borrowers with credit ratings of 580, great news for those with bad credit loans. It is also a large P2P network, with over a billion dollars borrowed. The site does not charge origination fees on their personal loans but do expect a bit higher rates of about 9%. You can compare their rates with other loans for low credit scores.
The Lending Club now approves applicants with credit rates of as low as 620. This company was among the first peer-to-peer platform to publicly sell shares. It offers both personal and business loans, as well as educational and medical loans. It is one of the biggest P2P lending sites, enabling loans of lower interest rates. Loans can be paid on fixed monthly rates for up to 5 years. No penalties are charged for prepayment, but a 5% late payment fee applies. Interest rates are at 5.99% to 32.99%. Enjoy lower interest rates if you have good credit score, but if not, you might have to go for higher interest rates.
Upstart is another peer-to-peer lending site for people with not so good credit score. It is a younger site that targets young professionals and students. It has a unique business model that gives importance to the potential of borrowers. It considers your education, such as your school or academic performance. It also takes into account your employment history. Thus, your poor credit score doesn’t define you when you choose to borrow through Upstart. Borrow $3000 to $25000, pay it for up to 3 years, and get the funds you need to pay for your tuition or afford a travel spree.
If you are one of the many borrowers in the US who struggle to be approved of a personal loan from a bank due to very tight access, P2P offers leaner and more efficient processing. Since P2P investors run less overhead, they are able to provide loans to people with bad credit scores. With the growing number of companies offering P2P lending, the types of loans to choose from are also expanding. Like traditional loans, in choosing which company to use, you can consider interest rates and loan terms. However, if you have a bad credit score, your main consideration would be their credit score requirement.
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