Peer to Peer Lending is it Right for You
Most people have heard that in this present economy banks are not lending. Both business and individual borrowers alike have been impacted by the lack of financial resources available. In fact, many credit card users have experienced unprovoked increases in interest rates, decreases in credit limits, even when their payment history has been stellar and there are significantly lower viable credit offers in our mailboxes. Unfortunately, recent reports do not show this trend ending soon. Welcome to the new lending economy.
The real problem is that financial resources are still necessary for our economy to rebound by both the business person and the individual. So where does one turn to when the banks have all but shuttered their lending doors? Many are turning to peer-to-peer (P2P) lending as an alternative-lending source.
How does it work?
P2P lending is a non-traditional financial solution for borrowers who are looking to fund their projects. In most cases a borrower can request a loan of between $100 and $25,000, and in some cases specify the maximum interest rate they’re willing to pay. The ones that I found are available online and loan requests are submitted electronically. Lending criteria through the P2P site allows a potential lender to evaluate hundreds of borrowers, who explain why they need a loan, and provide a credit history and a debt-to-income ratio. The borrower’s full personal and financial information however is shielded from view.
Who can apply?
Anyone can apply as long as you meet minimum application requirements. Borrowers seek loans for a variety of reasons, such as opening businesses, paying off hospital bills or even funding medical procedures like braces for a child. Presenting a solid case for the loan request by telling your story is important in getting funded.
What are the benefits?
For many individuals in this present economy P2P lending allows the opportunity to find financing where they would have otherwise been turned down by traditional lenders. It allows the borrower to interact with real people who lend for a range of reasons other than just for profit. It can also assist potential borrowers in building a credit history for the future.
Where can I find peer-to-peer lenders?
Prosper Marketplace is one of the first and the largest P2P lenders, it has been in business since 2006, has over 950,000 members and to date has funded more than $194,000,000 in P2P loans starting at $1,000. Prosper pioneered peer-to-peer lending, which allows people to invest in each other in a way that is socially and financially rewarding. Prosper uses an auction type model that allows potential lenders to bid against others to fund your loan.
Prosper also offers investment opportunities for lenders to build an investment portfolio that could potentially earn six percent to 16 percent based on investment risk. This is in addition to the lender’s ability to bid on individual loans and trade loan notes that they may already hold. New lenders can get started with Prosper and P2P lending with as little as $25. As always be sure to do your due diligence before making any investment. Go to www.Prosper.com for more information.
Bottom line, if you have been turned down by traditional lenders or are looking for an alternative to approaching banks for financing your next project you may want to consider P2P lenders. In this new economy you may find that peer-to-peer lending is the new tradition in loan funding.
© 2010 Ask Yvon is a written by S. Yvon Harper for Focus on Finance, LLC – (513)543-1363. All rights reserved. Contact or questions at www.FocusOnFinanceOnline.com for help in getting personal with finances. Listen online at www.BlogTalkRadio.com/YvonSpeaks. Readers are strongly urged to consult with a qualified legal or tax advisor to analyze your specific financial situation before application of any advice from this column.
What if…
No phrase opens wide the door of possibilities more than ‘What if…’ It’s not hard for your imagination to pick a subject and dream away without limits. The challenge is depending on what topic you pick you may choose to embrace it or want to run screaming for the hills.
During the last several months I have been facing a series of major life challenges. Especially with regards to caring for my husband’s and my aging parents. One of whom passed away in May. It hasn’t been an easy subject to approach due to the possibility of the ‘What if’. One lesson I have learned is that you have to keep going regardless of the possibilities.
The ‘What if’ for us has been sort of positive, because our parents took some beneficial steps to put their affairs in order, while they were still able. Even though every ‘T’ wasn’t crossed and every ‘I’ dotted it is still better than the possibility of ‘What if’ they had done no planning at all.
A big challenge has not been that they didn’t plan, but in some cases finding the financial records. This has been one adventure after another that I wish I didn’t have to undertake, but you must keep going.
With that in mind I’ve discovered and am now personally using a tool that is more than it’s weight in gold. It’s called the Financial Records Passport and it has the ability to hold ALL your personal financial information in one place. Believe me, after the goose chases I’ve been on with finding my parents financial documents I know its value!
The Financial Records Passport is amazing! It efficiently and effectively documents all your needed financial information in one place and is as small and portable as your cellphone. And it easily lends itself to store neatly into a safe deposit box or be provided to your appointed financial representative to be used in case of emergency. You can best believe that they will thank you for it too!
Anyone reading the news these days should understand why documenting your financial records is not just for the elderly. Reading about the unexpected tragedies of both young and old makes this task very real and necessary for us all! Take advantage of the time you have right now to make things easier on your loved ones by getting your own Financial Records Passport today!
The cost of the Financial Records Passport is only $12.49 plus s/h AND there is no additional shipping charges on the 2nd or 3rd passport in the same order. Give one to all your loved ones and recommend the Financial Records Passport to your friends. Create new possibilities should tragedy strike and your loved ones have to answer the question…’What if…’
In Credit Recovery Cash is King: Fund Your Own Financial Recovery
Recently I had a client ask me “How do I rebuild my credit without getting any credit offers from banks?” In this economy this client is far from being alone. Let’s face it with the more than 25 million Americans out of work, due to a stalled economy; many are facing a credit deficit. Nonetheless, it is imperative to rebuild new credit when recovering from any type of financial set-back that has negatively impacted your credit.
So how do you acquire genuine credit offers from a bank if you find yourself in a credit recovery dilemma? First let’s distinguish between the types of available credit sources, because there is a big difference. I like to refer to them as A-type credit and B-type credit profiles. Based on the facts for each type you may be able to determine which type of credit profile fits your situation.
A-type credit is the preferred standard. They are offerings from major financial companies genuinely received by individuals with near perfect credit, as validated by a high Fico credit score. A-type credit offers may provide perks such as program points for free travel, shopping or other services with use of the card. It provides a low interest rate along with no annual fees. A-type credit also provides a reasonable initial credit limit that is raised with responsible credit usage. Most importantly, it also attracts other credit offers from A-type creditors. This is the preferred type of credit that you need to obtain in your financial recovery.
However, in this economy if you are credit challenged you don’t need to look in your mailbox for A-type credit offers, because they are not coming. Quickly you will discover you have entered the world of B-type credit, which is substandard and far less desirable. B-type credit offers are made by credit vendors who intentionally target individuals with imperfect credit profiles. A low Fico credit score, bankruptcy, none or limited credit relationships, or other negative factors reporting on your credit report will place you in the B-type column. The B-type credit card offerings generally provide a high interest rate; many require application, use and annual fees. Many times B-type credit cards provide extremely low credit limits, which in some cases are used up by initial fees before you even receive your official credit card. Sadly, they also attract other B-type creditor offers. Avoid B-type of credit offers at all costs.
Again, how can you get A-type credit cards if you are credit challenged? The truth is you may initially have to pay for the A-type credit you need. That means you may have to provide the cash funding for the line of credit you desire. These types of self-funded credit cards are referred to as Secured Credit Card accounts. They are different and carry better benefits than pre-paid credit card, which do not assist you in rebuilding your credit.
Now I can hear some of you saying “Why would I want to do that?” The answer is simple, because you want to attract other A-type creditors who you won’t have to self-fund in the future. Other advantages include they report your responsible credit activity on all three major credit reports to raise your Fico credit scores, it is legitimate prestige of association with A-type mainstream creditors, and you control your desired credit limit. Best of all, if done correctly you can receive the return of your initial cash deposit, with the ability to continue credit card usage, in as little as 12-months.
While you can look for these types of creditors on your own I have compiled a national list of my 5 top choices for A-type secure credit card companies to quickly use in your financial recovery. Believe me when I say all secure credit cards are NOT created equally. You can find out more information at www.FocusOnFinanceOnline.com or by calling us at 513-549-1363. Another place to look locally for an A-type credit card is at your community credit union. I highly suggest that if you do not have a relationship with a local credit union that you establish one. Credit unions offer many benefits, one being they are able to connect with you and your credit situation as a real person and not just a paper application.
Don’t be afraid to use your cash to build your credit options for the future. Credit recovery is a difficult task in this new economy, but if you know how, where and what to look for in available credit sources you will speed your financial recovery.
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© 2010 Ask Yvon is a written by S. Yvon Harper for Focus on Finance, LLC – (513)549-1363. All rights reserved. Contact for questions at www.FocusOnFinanceOnline.com.
Listen to Yvon online at www.BlogTalkRadio.com/YvonSpeaks. Readers are strongly urged to consult with a qualified legal or tax advisor to analyze your specific financial situation before application of any advice from this column.