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The Internet has changed our lives in many different ways. Many of us now work at home thanks to the Internet, do our shopping online, access our bank accounts, communicate with friends, and buy and sell stocks. One very recent change is that we can now get unsecured personal loans from online lenders without ever stepping into either a bank or credit union. There is also a new class of loan providers called peer-to-peer lenders. This is where you borrow money from another person or group of people with no third party financial institution involved. You could go on the Internet, fill out a couple of online forms and find out in literally just a few minutes whether or not you would qualify for a loan. And if you did qualify, you would probably get the money within a day or two. Three of the most popular of these peer-to-peer lenders are Prosper and Lending Club.
How much could you borrow?
All three of these peer-to-peer lenders will loan up to $35,000 or much less than you could probably get with some type of secured loan. The interest you would be charged will be anywhere from 6.73% on up – depending on your credit history. To put this another way, your interest rate will depend on the degree of risk you represent. If potential lenders see you as being low risk, you would probably qualify for the lowest or one of the lowest interest rates.
Here are some tips that could help you get a peer-to-peer loan and at a good interest rate.
- Tell the truth
- Describe your situation as much as possible
- Be sure to check your grammar and punctuation
- Have realistic expectations
- Think like a lender – the more you can convince the potential lender that you’re a good risk the better
- Don’t act desperate
- Respect the contract
Watch out for scam artists
While the Internet has brought us many good things it has also brought us some very bad things in the form of scam artists. If the idea of getting an unsecured peer-to-peer personal loan interests you, make sure you check out the company very carefully before signing up for a loan. The best way to do this is probably to go online and look for reviews. For example, if you type into Google the term "reviews of the lending club," you would get at least eight pages of results – or pages related to reviews of this peer-to-peer lender. You might also check with the Better Business Bureau to see if it has accredited the company