The Best Peer-to-Peer Lending Companies in 2020 - Fortunly News

The Best Peer-to-Peer Lending Companies in 2020 - Fortunly News


The Best Peer-to-Peer Lending Companies in 2020 - Fortunly News

Posted: 05 Oct 2020 08:39 AM PDT

If you've been denied a loan from a brick-and-mortar bank or conventional online lender, there are still options for you to explore. Peer-to-peer funding is offered both to businesses and individual applicants alike. It works differently from the financing you may have received or applied for in the past.

So, how do person to person loans work? P2P lending sites connect prospective borrowers directly with suitable lenders. Instead of borrowing from a financial institution, applicants receive funding from an individual or group of investors willing to loan them the money. By removing the middleman, P2P lending platforms are able to offer better rates and terms than traditional lenders.

However, given that no two lending marketplaces are the same, it's important to compare multiple options before choosing the best provider for your needs. To help you find the most suitable option, we broke down our methodology into two large sections. The first part is devoted to loan characteristics, while the second focuses on borrower requirements.

Loan Characteristics

Peer-to-peer loan companies have only been around for less than two decades, however, the number of competing online lending marketplaces is already considerable. Although most of them work in the same basic way, providers can vary quite a bit in their funding types, loan amounts, interest rates, repayment terms, and target clientele.

To help you structure your search, we've scoured the online P2P marketplace and made a list of the most important feature to take into account while searching for the best peer to peer lending site:

Loan types offered

First of all, it's important to mention that some P2P loan websites focus on providing business loans, while others only serve individual consumers. There are also online lending marketplaces where both businesses and individuals can find suitable funding options. However, before checking any other loan characteristics and eligibility requirements, make sure that you are in the right place.

As far as funding types go, term loans (or installment loans) are among the most common options for both personal and business loans. Many peer-to-peer lenders also provide personal and business lines of credit, merchant cash advances, invoice factoring, and working capital loans. Note that some providers specialize in a single financial product, while others provide a wide range of financing types.

Speed of Approval

One of the most valuable features of online lending marketplaces is that borrowers don't have to wait for months to find out whether they've qualified for the loan they've applied for. Not only do the best peer-to-peer lending sites process and approve personal and business loan applications at record speeds, but most of them even make the funds available to the applicant in less than a few days.

Term Length

Term length or loan term is essentially the amount of time you have to repay the money that you have borrowed. Depending on the loan type and the provider's repayment policies, repayment periods can be as long as a few decades or as short as a few months. In addition to term lengths, we also suggest you take repayment term into account. To avoid late payment fees, make sure that you'll be able to keep up with your monthly, weekly, or even daily repayment schedule.

APR and Fees

When applying for a loan through a loan marketplace, you should also make sure that you are aware of all the peer-to-peer lending rates. Annual percentage rate (APR) is there to give you an estimate of how much a loan will set you back in one year. Keep in mind that APR represents much more than just the interest rate. In fact, it also includes all the additional costs that come with a loan – such as origination fees or closing costs. Note that some providers also charge non-sufficient funds, late payment, and prepayment fees.

Guarantees and Collateral

While most personal loans are unsecured, business funding usually requires personal guarantees and collateral in the form of business assets (equipment, inventory, vehicles). Owners of established businesses usually opt for secured loans as they come with lower interest rates, while those who are just starting out go for unsecured funding options.

Borrower Qualifications

When comparing the best peer-to-peer loans, it's also important to look at multiple providers' eligibility requirements. Most lending platforms display the qualification they require on their websites. This way, prospective borrowers who can't qualify don't have to waste their time filling out applications.

Given that taking out a loan is a serious responsibility, P2P platforms make sure to consider multiple factors to evaluate an applicant's overall financial situation before they extend an offer. The most important factors include credit score rating, time in business for business applicants or years of credit history for individual applicants, and annual revenue.

Credit Score Rating

It's not a secret that it's much easier to get a loan with strong credit. However, most P2P lenders believe that a turbulent credit history shouldn't prevent anyone from fulfilling their goals in the future. We made sure to look at lending marketplaces that look beyond credit score when evaluating loan applications and managed to find some of the best peer-to-peer lending for bad credit.

Time in Business

Another advantage of peer-to-peer commercial loan options is that time-in-business requirements aren't as strict as those a bank or a credit union may impose. While traditional funding sources are only available to established businesses that have been operational for more than a decade, peer-to-peer business loans are attainable even to those that are still at the beginning.

As far as personal loans go, the lender may look at the length and steadiness of your credit history. The good news is that there are companies that accept applications even from those consumers who are just starting to build credit.

Annual Revenue

If you've ever shopped around for business or personal loans, you'll probably know that even the best loan companies won't extend you an offer unless you prove that you already have a good income. Fortunately for prospective borrowers whose financial situation isn't ideal, the best peer-to-peer lending organizations have options for young applicants and fledgling entrepreneurs.

Choosing Between a Secured and Unsecured Credit Card - Business.com

Posted: 14 Sep 2020 12:00 AM PDT

[unable to retrieve full-text content]Choosing Between a Secured and Unsecured Credit Card  Business.com

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