Online banking is not all that new, payday loans online a little bit newer, but the newest and most popular financial vehicle in the new technological world of finance is peer-to-peer lending (PTP). More and more these days, consumers and small businesses are finding themselves being driven to search out alternative methods of raising cash. And, peer-to-peer lenders, like Lendingclub and Prosper, are being viewed as both more cost effective and more accessible than all other types of lending.
More and more consumers these days are searching online for getting a personal loan for starting a business, debt consolidation, and many other financial needs. Many of them are unable to get a conventional loan or credit card for covering their financial shortfall, so they apply to one of the many online lenders and succeed at getting the funds they need at an average interest rate that is seven percent lower than other options, often resulting in an average 32 percent savings.
How do peer to peer online loans work?
Applying is easy and only takes a few minutes. Once you have filled out the online application, the lender will advise you regarding your interest rate and how much the monthly payments would be. At that time, you can request a loan amount of up to $40,000. Pre-approval only takes a few minutes and then you can decide whether you want to proceed with your loan or not.
Please Note: There are a few states where residents cannot get a PTP online loan and they are Idaho, Iowa, and W. Virginia.
Then your loan is listed on the lender's website and will include your credit grade from a high of "A" to a low of "G" and the purpose of the loan. Your interest rate will range from 5.99 percent to 35.96 percent based upon your credit grade. For example, a Grade "A" interest rate could be less than 8 percent while a Grade "G" could be as high as almost 32 percent.
Once your loan is funded, you will receive funds into your designated checking account. Your scheduled loan installment payments will also be deducted from that account as well.
What is the credit score needed for online direct lenders?
Using Experian ScoreX Plus credit score with an average range of 300 to 900, here are the parameters:
- Excellent= 760+
- Good= 700 +
- Fair credit= 640+
- Under 640= poor credit
The minimum credit score for lending club is 600. The average credit score is close to 700
Other key factors for Loan approval
- Debt to Income Ratio: Under 35%
- Minimum 3 Year Credit History
Our Findings Regarding Online loans from Peer to Peer Direct Lenders
After a great deal of research and reviews, we found that Lendingclub, know as the market leader in peer-to-peer lending, is the best option. This is based on their ease of use, customer service, and interest rates. Being the leader has helped them to streamline their process, fund faster, and give larger loans. Their customer service was found to be superior to some other leading PTP lenders and their fees comparable or better.