There are many different ways of borrowing. As traditional means of borrowing, such as through a high street bank or other traditional lender, has become more difficult, other ways of borrowing have emerged over the past few decades. Credit Unions, Payday Loans, and Peer to Peer borrowing are all viable options should you be looking to secure a loan or other line of credit, especially if you are looking for a fast turnaround from application to the funds being accessible in your bank account.
Lending streams have continued to diversify out of necessity and peer to peer borrowing (or social lending as it is otherwise known) has become a popular option for many people. The idea behind peer to peer borrowing is that there is a perfect match up between borrowers and those who are happy to lend it to them. All of this is achieved without the need of a traditional financial institution, such as a bank or building society. A peer to peer website will instead match your borrowing needs up with a person who has the cash to lend you.
There are several benefits to borrowing money from a peer to peer website. It can be a lot cheaper than borrowing from a high street bank or building society. This is even more the case should you have a positive credit score. There is also, in theory, no limit to the minimum loan amount that can be borrowed (which isn’t always the case with most credit services), which is brilliant if you are only looking for a short-term loan. Peer to peer lending is also a viable alternative to traditional lending streams if you have adverse credit and you have already been rejected when applying for a loan with a bank or building society.
You should be aware that interest rates might be higher than you would find through traditional means, and that you might have to pay a fee to access the funding you are seeking. It is always worth bearing in mind the various pros and cons before committing to any kind of credit or financial product. It might be that a payday loan is a much more effective way for you to borrow over a short period of time than from a peer to peer service, or that you should continue to save for the time being and not apply for any form of credit at this time.
With the collapse of QuickQuid and other payday loan companies, it is no wonder that people are always looking for something different to quench the need for a short-term loan. There are respectable and responsible lenders working within the payday loan sector, so if you are looking for a short-term loan it is vital that you conduct thorough research and find the responsible lender that suits your needs perfectly. You should only ever borrow money if you can afford to pay it back, and the best payday loan companies will offer complete transparency with regards costs and fees, as well as flexibility should you encounter future troubles. Peer to peer lending certainly provides a viable alternative if you are looking for one though.