A personal loan, also called a signature loan, is generally an unsecured loan, which means that instead of a collateral, the individual borrower needs to prove that they are creditworthy to secure one.
On a P2P platform everybody of legal age can get a consumer loan for personal use, granted a good credit history and current employment status.
Once a person addresses a loan request to a P2P platform, the request will get quoted to establish the rate, the overall cost and the amount of monthly repayments. Then, the borrower will be asked to provide proof of their creditworthiness to get an approval. As soon as the loan gets approved, it is put on line to be financed by a large number of individual or institutional investors.
Depending on a platform, a person can get from £1000 to £500,000 to realize all kind of personal projects: buy or renovate a house, finance their education or a dream travel, make a substantial purchase (vehicle, jewellery, home equipment) or finance a life event (marriage). One can also refinance a loan, pay off a credit card debt or finance a mortgage. A personal loan may help realising a long time project or get out of an unexpected situation, always at the best rate.
Using CompareLend.com will give you access to a multitude of peer-to-peer lending platforms at once. Through an easy 3 steps process, you can easily define your needs and plans, compare offers available on the peer-to-peer lending market and apply online. As we see it, comparison is key to get a loan or an investment easier, faster and cheaper.
For the borrower there are 3 major benefits:
Simplicity: it is easier to get a loan through an online platform, because unlike going through an official financial institution, fewer constraints are imposed by the lenders: credit history, purpose of the loan, etc. get accepted or rejected by the lenders, according to their risk management strategies.
Money saving: for 2 reasons: the cost of borrowing is always lower than in a bank and generally, no additional fees are imposed upon a borrower, such us application fee, processing fee, etc. as the whole process happens on line.
Time saving: it is quicker to get approved, having access to a huge pool of lenders, and quicker to get funds, generally between one and three weeks.
The peer-to-peer lending works pretty much in the same way as classic lending, with the rates, monthly payments and risk taking. The fundamental difference is that no traditional financial intermediary is involved in the process. Generally, borrowers’ needs and lenders’ resources meet through an online platform, giving the users an easier access to credit on lower rates and risk-adjusted returns on investments.