Peer to Peer Loans
Peer to Peer Loans
What is peer to peer lending?
Peer to peer lending (also known as crowd lending) is a form of borrowing and lending between individuals without a traditional financial institution such as a bank or building society being involved. Instead, if you wish to borrow money, the peer to peers websites will match you with people who are willing to lend it to you; and the same vice versa.
Advantages of peer to peer lending
- As the banking middle-man is cut out, borrowers can often receive slightly lower rates, whilst savers can get considerably improved headline rates.
- Some peer to peer websites have no minimum loan amount, which is beneficial if you are only looking to take out a small loan.
- The majority of peer to peer lending sites allow you to repay the loan early without paying penalty fees.
- They provide an alternative form of funding if you have difficulty getting a loan from a bank or building society.
Considerations of peer to peer lending
- If you have a poor credit score you might still be ineligible to obtain a peer to peer loan.
- Interest rates of peer to peer loans still have the potential to be higher than building societies or highstreet banks if you have a poor credit score.
- There is often additional arrangement fees required to pay for the loan.
Find the best peer to peer loans
Whilst peer to peer loans are not as ubiquitous as traditional loans, it is still important to shop around to look for the best deal. Additionally, as the criteria for each loan will vary depending on which peer to peer lending site you use, we recommend that you contact a mortgage broker, who can evaluate your personal circumstances and review the best options for you.
As a mortgage broker, we also work with the majority of peer to peer lending websites. This means we have access to leading and exclusive peer to peer lending deals that you won’t necessarily find on the high street.
If you would like to find out more about peer to peer lending, or would like to review your options, why not call us today on 0117 313 8872 for a free initial consultation.