Peer to peer (P2P) lending has been gaining in popularity — especially since the recession began. Part of the reason for this is due to the difficulty associated with getting loans from banks. Another issue is that traditional banks, in some cases, charge higher interest rates. If you are looking for a way to get a loan, in some circumstances it might make sense to turn to P2P lending.
Start a Business
Small businesses have been finding it difficult to get financing for their businesses in the current economic climate. You can get money to start a business, or to expand your current business with help from P2P lending. Business microfinance company Kiva has come to the U.S., making it possible for small businesses in America to get help similar to what has been seen in developing countries. It helps to have good credit, and a business plan, in order to get funding for your business.
Get a Personal Loan
College Funding Gap
When it comes to paying for college, it is best to get free money, if you can. You should also consider using a college investment account (529 or Coverdell) to help you build up money for college. After that, your best bet is government loans, since you can get low interest — some of which might be subsidized if you qualify. However, if you still can’t pay for your college education, you can use P2P lending to help you close that gap. There are special sites, like TuitionU, that are specifically designed for student loans.
Nearly anyone can benefit from P2P lending. For those who are especially interested in getting a competitive interest rate, P2P lending can be a money-saver. Those with good credit are likely to benefit the most from P2P lending, since rates can be quite low. Additionally, those who offer more details about how they will use the money are more likely to be fully funded.