Applying for a P2P loan may be a little more involved than other lending platforms due online payday loans Indiana residents to proprietary grading systems for borrowers. Moreover, peer-to-peer networks often use in-house underwriting systems that look at more than credit scores to get a better idea of your financial risk. You may be required to answer specific questions such as what you plan to do with the money and some information about your educational and employment background.
While specific credit requirements and underwriting methods will vary by lending platform, I’ve seen the highest approval rate for really bad credit from two websites, PersonalLoans and BadCreditLoans. There are other websites that approve bad credit loans but these have stuck out as most recommended by readers.
What is the easiest loan to get with bad credit?
If you’re struggling to get approved for a loan, there are three changes you want to make that will improve your chances.
- Ask for a lower amount. Even if it’s only enough to get you through the next six months, getting a small loan and paying it off will help your chances getting a bigger loan.
- Ask for a shorter-term. Lenders will approve a one-year loan before they’ll consider a 5-year term.
- Change your loan purpose to ‘debt consolidation’. You can use the money for whatever you like but many investors only put their money in loans that are used for paying off other debt.
Peer to peer lending has opened up credit to millions of Americans since the financial crisis. Getting an online loan is no longer something only people with perfect credit can do. With an easy online process, now anyone can get a peer to peer loan even with bad credit. Understand how these websites work and how to use the process to get the money you need.
when u can go to a bank and get an interest rate of 4% it seam to me that all ur loan are of a high risk
I do not know of any bank that extends an unsecured loan at 4%. You are probably thinking of a mortgage loan. The big difference is that the property is held as collateral, so if you default the bank gets your house. These p2p loans are uncollateralized, so there is more risk premium priced into the rate.
Not sure what you’re talking about with the 4% unsecured bank loan but yeah, I’ve never seen one with a rate that low. P2P loans usually start around 6% for 800+ credit scores and up to 36% for bad credit, which is the rate the investor gets after fees.
This is a great breakdown of p2p lending. I am trying to get my husband on board and he has not been able to wrap his mind around the idea that you lend to MANY people, not just one, LOL. Now that we are debt free it is becoming increasingly important for us find places to park our money. I am trying to get him to join me in a p2p investment, so I hope this article will help!
Thanks Aja and congrats on being debt free! Peer lending is going to be an accepted asset class soon but it’s still pretty new for most people.
Investing in loans is a win-win with returns comparable to stocks and the safety of bonds. Check out the article linked below for the 3 biggest risks for investors, really just risks you’ll find in any investment.
I’m interested but I’m in Canada. And there doesn’t seem to be many P2P opportunities here, if any. Would you happen to know how I can do this in Canada? Or any companies doing that here?