Peer to peer lending discussion

January 1 12:00 am

In our consumer culture, there is absolutely no shortage of places to borrow money, but the question of where to find the cheapest loans can pose to be a bit more of a challenge. The main reason for this is that lending itself is big business, and lending outfits of every stripe have cropped up all across the financial landscape, so much so that finding a measurement for what would even be considered an "average" loan has become more difficult in recent years. The basic definition of a "cheap cash loan" would be a loan in which the borrowing costs are minimal and the repayment terms are reasonable. In other words, the ideal loan has a favorable (not injurious) interest rate, and some light at the end of the tunnel where repayment is concerned.

While this combination may seem like the "holy grail" of loan characteristics in today's economic climate, these types of loans are available if you're willing to do a little homework. The thing that many people forget is that lenders actually want to lend money to low-risk candidates. Keep in mind that the job of a lender is to mitigate risk as much as possible. The lower your theoretical risk of default is in a lender's eyes, the more willing they will be to lend you money. If a lender investigates your credit history and sees that you are reliable enough to repay loans according to the agreed-upon terms, you are considered to be a low-risk candidate to the lender, and they will more than likely offer you a preferable interest rate and more reasonable overall repayment terms. For this reason, maintaining a good personal credit history will always go a long way in obtaining a loan for acceptable borrowing costs. It almost goes without saying that if you want to find the cheapest loans available, you should avoid payday lending companies at all costs. Although the immediacy of availability is a strong point with payday lenders, their exorbitant interest rates most of the time borderline on loan sharking.

It is not uncommon to hear of payday lending outfits charging annual percentage rates (APR) of well over 200 percent. Simply put, you will not find a cheap loan anywhere in the sphere of %link1% lenders or anything similar. Banks and credit unions are usually more stringent about to whom they will lend money, with collateral standards and proof of income requirements often being beyond the reach of many people who find themselves in a "cash crunch". For this reason, peer-to-peer lending has become a popular alternative to banks and credit unions for people who are seeking cheap loans.

There are several prominent peer-to-peer lending websites available; a simple Internet search will reveal the most popular choices. The major advantage of peer-to-peer lending sites is that the power of "crowd funding" comes into play; whenever you post a certain amount needed for a personal loan, there may be several people contributing to the funding of the loan, versus depending on one entity to provide all of the cash in a traditional loan scenario.

Although there are several options available today to borrow money, finding the %link2% definitely requires a little more "elbow grease" and due diligence. The important thing to remember is that thorough investigation will benefit you greatly in the long run. Be sure to research APR, down payment or collateral requirements, income requirements, repayment terms, and other common aspects of your average loan before signing on any dotted line. Reading the fine print could save you boatloads of money in the long run.