If you are in need of money, there are several options that are available to you. Each of them has their pros and cons. One option that you have is to use something called a peer-to-peer lender. That may end up being the best option for you.
Most people aren't sure what peer to peer lending is. P2P lending happens when the people who have money connect directly to the people who need the money. In other words, you are talking directly to the person who is going to lend you the money. You aren't dealing with a loan officer like you would be if you went to a bank or credit union.
How P2P Lending Works
The way that it works is that you contact a peer-to-peer lending website. You submit an application that says how much you need, your income, and all other pertinent information. Then your information is put on a database so that the lenders can access it. You may have one lender, or you may have several investors that lend the full amount that you need. Then you make payments back into the system, and that money goes back to the investor or investors. There is a fee associated with the loans and that goes to the company that runs the P2P website.
Benefits of Peer-to-Peer Lending
One benefit of using a P2P lending site is that there is less overhead. That lower overhead translates into lower rates for you when you are borrowing money from them. If you ever decide to lend money through one of these sites, that lower overhead also means that you are going to get good returns on your money. Another benefit to a lower rate for you is that it's going to be easier for you to build up your credit if you are just starting out. It can also be a way that you can build your credit back up if you have bad credit.
Drawbacks of Peer-to-Peer Lending
There are some drawbacks to P2P lending. One is that the lower your credit rating is, the higher your interest rate is going to be. There is no federal oversight on peer-to-peer loans, so the site and the lender are able to set their own rates.
If you are in need of cash, you may want to check into peer-to-peer lending. It may fit your needs and situation very well.