A Peer to Peer Lending Review Process

What is peer to peer lending? Peer to peer lending is when you use a company or individual that already has established a good credit history but offers credit cards or loans to individuals who have less than perfect credit. The reason these companies are able to offer their services to individuals with bad credit is due to the fact that they do not rely on the ability of the individual to make payments on time as is the case with banks and traditional lenders. In short, if an individual has poor credit but can afford to make regular payments on time then he should be happy with peer to peer lending. There are two main benefits that an individual can enjoy when using this type of lending.

One of the most obvious benefits of peer to peer lending is the fact that the interest rates are typically lower than what one would pay if they were using a bank or traditional lender. Because the company or individual providing the credit product is putting up collateral for the loan, they are in essence giving up some of their profits in order to secure the loan. If the borrower does not repay the loan, the lending institution may repossess the item. This does happen infrequently, but is not always a scenario that a borrower wants to be in.

Another benefit that peer to peer lending presents is the accessibility factor. Unlike banks and traditional institutions that are found in the neighborhood, peer to peer lending is usually done online. This is advantageous because the individual does not have to go through a series of interviews or background checks in order to secure a loan. In fact, there may be no credit check required at all. With this being said, there is still some screening going on as the individual is considered for the individual loan.

As far as fees go, some peer to peer lending institutions do not charge any fees at all on the individuals they are approving for credit. Others may charge a small monthly fee. However, the majority of peer to peer lenders charge a minimal fee for the use of their credit facilities. Of course, there are a select few that charge outright fees for the use of their credit facilities.

One of the most beneficial aspects of peer to peer lending is the ability to get access to loans for those with adverse credit. Some of these individuals may have had their credit rejected due to past financial problems. With the peer to peer lending financing structure, these individuals can get access to a credit facility. In many cases, this is not only possible but actually encouraged due to the positive feedback that some peer to peer lending establishments give to those who seek their credit services. These positive feedback systems are designed to assist those who have been turned down for conventional credit by helping them get back on track with their credit.

The peer to peer lending review process can be an intimidating one for some people. However, with the proper peer to peer lending review system, those individuals who are turned down for conventional loans can get back on track with a peer to peer loan. It is important to remember that in the peer to peer lending community, it is about giving back to the community.

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