Many people can admit that they have rather negative connotations with regard to traditional banks. Inflexibility and strictness make banks rather an archaic institution which loses to the innovative peer-to-peer (P2P) lending system.
To put it briefly, P2P lending uses online platforms to provide a tool which connects potential borrowers with lenders. Eventually, it costs much less time, fuss and red tape than in the case of the traditional banks.
P2P lending has become a great success. The Internet-centered world must have affiliated such a solution to the traditional system’s imperfections. It is an easier, cheaper and faster way of borrowing and lending money.
The wide variety
Along with the growing popularity of this system also the competition between platforms is increasing. The general rules are the same, but the platforms offer differently targeted products. Also interest rates, conditions of eligibility or tenures can vary. We list some of the best known websites which you should visit if you seek a reliable P2P platform.
The father and the biggest player of peer-to-peer lending market. The loans offered by them start at $1,000, and $15,000 when it comes to businesses. The maximum is $35,000 and for business $300,000.
It is the U.S. prototype of P2P lending platforms which noted a huge growth since its very beginnings. The number of its members reaches 250,000 people. The purposes of loans offered by Prosper are richly varied. You can loan from $2,000 to $35,000 for 3 or 5 years. The annual rates start at 5.99% and end at 36% for the new borrowers.
This platform is good for the younger clients with short credit history and low FICO score which precludes receiving a loan in a traditional way. Actually, for Upstart the score is a minor factor and these are your education and work performance which count most. Here you can obtain from $3,000 to $35,000 at an annual rate of minimum 4,7%. They offer loans for a very wide range of purposes.
SoFi is a place for the beginning professionals who need help in paying their debts. SoFi’s loans are rather big ($5,000 to $100,000). Unfortunately, to become eligible for their loan you must fulfil certain conditions.
If you have a good credit history and need a lot of money visit this platform. Also here the variety of your loan’s purposes is wide. The interest rate is set between 6.63% and 36% and is dependent on the amount of money loaned and the loan’s durance. Apart from that, your credit score, credit usage or history also influence the interest rate.
A platform which offers the annual interest rates between 7,12% to 29,99%. The minimum amount of their loans is $1,000 and the maximum $25,000. Peerform gives a chance for people with low credit scores. They utilize their own Peerform Loan Analyzer which is a substitutive tool for FICO scores. With their loan you can finance many different things like your new car, wedding, house redecorations or debt consolidation.
This platform is centered on financing small firms. Its creators believe that the banking system does not support small businesses enough and they decided to look for a solution to this problem. What is interesting, the whole thing started with their own experience of trying to receive a loan for 96 times, but to no avail. For now, their result is $1 billion loaned to about 8,000 businesses. Currently, their platform has 40,000 of investors, including the British government. If you need money for your business consider Funding Circle. Their offers start at $25,000 and the maximum reaches $500,000.