Tag Archives: money
Is Private Lending for You?
If you do not have outrageously generous, rich relatives, you might think that, when it comes time to get a loan to buy or renovate a home, that your bank and credit union are your sole sources of major capital. However, the Internet has revolutionized the way we do business and, now, how we can get loans. While it has been accused of separating people from person-to-person interaction, the Internet has actually started to bring people back together in business.
Prosper.com is currently the United States’ largest person-to-person (P2P) lending company on the Internet. It functions as sort of a loan E-bay, allowing people to bid on loans they wish to invest in, and buyers to get whatever amount of money they want, for the price they are willing to pay. Prosper allows people to invest as little as $50 per loan they wish to finance. This enables people to spread their money around a wide area, providing for a wider variety of investment.
One of the most unique and compelling aspects of the private lending scene is the ability for borrowers to tell their story. The lending company has no way of knowing whether someone’s request for $10,000 to pay off their sick kid’s medical bills is true. You might be helping sent Little Johnny off to college or remodel the bathroom; then again, you may just be funding someone’s drug habit.
Private lending companies have tried to make fraud a minimal part of the private lending experience. All borrowers and lenders go through a full credit check and the lending company will send the account to collections for borrowers who default. This may not mean that you will get a return on your investment; some people will sail off with money, never to be seen again, only to return to lending companies with another sob story.
If a P2P lending company collects the funds that you invested, you still may not see a return. The costs of collection agencies can easily take 50% of the debt that the borrower owes you, even if they manage to collect. This issue is starting to be addressed with lending companies, like Zopa.com, are offering investor insurance. They will cover up to $100,000 in investor funds.
For borrowers, private lending can be an excellent way of gaining funds for projects, school, or expenses. In return for lower rates than most credit cards, people can gain thousands of dollars for whatever purpose they want it for. Most P2P sites don’t encourage people with a bad FICO score to apply for a loan until they’ve improved their score.
Many people with less-than-stellar credit can take advantage of the opportunities of P2P lending with less problems than many have at conventional institutions. One thing that helps is the ability to tell a story – whether it’s to explain that you need to build an extra bedroom for your ailing mother or to pay debts left over from a hospital stay.
P2P lending is a newcomer on the scene, owing its inception to the Internet. It has brought back lending as a personal experience, as lenders can choose borrowers based on their credit score… or based on their stories. If you are a borrower, looking for a way to escape outrageously high credit card interest, you might try looking at one of these companies.
A Serious Emergency That Was Solved With A Payday Loan
Not so long ago we received a consult from a single mother going through a rather desperate situation. Her only child needed to go through a surgical procedure and she needed money urgently. Though she worked, payday was not soon and the money would not be enough either. The particularities of her emergency surprised us because they matched what payday loans were created for. We suggested applying for a payday loan and since she did, the problem was solved. Later, she visited us carrying her son in her arms and so I decided to write this article.
Using this case as an example, we will analyze the characteristics of a payday loan and the proper use it should have. Emergency situations happen every now and then and payday loans can save your day as they did to this lady. However, if you know how they work and how you should use them you will benefit more from them and will not need to count on the luck that this lady had when contacting us just on time.
Urgent Matters, No Time For Long Procedures
This single mother contacted us a few days before the day surgery was scheduled to occur. She wasted a lot of time trying to get money from friends and family with no luck at all. The amount she raised did not cover much. She did not need a lot of money though (the surgical procedure was not complicated). She just needed $1300 which the insurance would not cover because the procedure was needed to prevent a scar from showing when her son grew up.
As explained, she had committed to pay prior to the scheduled surgery which could not be postponed due to the nature of the injury that would heal leaving a scar if the intervention was delayed. Since there was no time for long credit and income verification processes, payday loans immediately came to our mind. Why? Simple, because payday loans can be processed within the same day and the money can be deposited into the applicants account by the next day.
Credit Problems, No Credit Checks, Few Requirements
This lady did not have a good credit score. Thus, even if she had the time to go through a long credit verification process, chances are that she would not have passed it. Fortunately, payday loans do not require credit checks at all. The whole loan approval is based on simple requirements that almost anyone can meet without hassles or sacrifices.
In order to obtain a payday loan, you need to show proof of income (by offering copies of paychecks receipts like this lady did or by showing copies of tax presentations if you are self employed) and you need to have a savings or checking account on a bank or financial institution where the money from the loan will be deposited and eventually the single or multiple payments will be deducted.
As you can see, payday loans are an excellent tool when there is an emergency. These loans where created to solve this kind of problems and not as a source of regular financing. As usual, our suggestion is to employ them wisely. If you think that your current situation is similar to the one explained above, then do not hesitate, the solution to your problem is a payday loan.