Over the last decade, more and more people have started using the internet for everything. So, it makes sense that people would start looking for ways to get a loan online. And in response to the demand, many different services have answered the call — from peer to peer lenders, to payday lenders. If you’re looking for a loan online, here are some places to start.
These banks offer many traditional lending services, such as auto loans and home loans, but do it from the convenience of the internet. If you are looking for a traditional loan online, this can be a great solution for you.
Peer to peer lending has become extremely popular because it is other individuals loaning money, not institutions.
As a result, there are no lending standards that have to be met, or other qualifications. Instead, most borrowers put together a post (like an eBay ad) that highlights what the money will be used for and why they would make a good borrower.
The company then vets the borrower, and puts together a credit score for the lenders to see. Lenders then bid on the loan, and if it gets funded, the company will handle everything.
This is a great alternative for borrowers who many not have the best credit, or are going to be using the loan for a non-traditional reason. Many of the borrowers on these sites are looking to start businesses, or are looking to consolidate their debts. As such, these loans are a bit more risky than traditional loans.
There are two main players in the market – Prosper and Lending Club, and several smaller ones. However, these companies are booming in the lending market. It was recently announced that Peer to Peer Lending Crossed $1 Billion in Loans Issued, as reported by Tech Crunch and the SEC. That is a lot of money changing hands online.
Finally, alternative lenders are getting into the online space as well. For example, there are many payday lenders that offer personal loans online and send you money almost immediately. Some lenders require documents to be emailed or faxed in, but since the internet is about convenience, many lenders have opted to avoid the extra hassle and streamline the process.
A popular alternative, and one that I’ve recently seen a large push from to enter the online space, has been online pawn shops. They’re letting customers mail in certain items (like electronics), while offering short-term loans or the option to buy your item outright.
While the online and technological era continues to push forward, things are evolving at a rapid rate. There are now more options than ever for people that are looking for a short-term solution to their financial woes and it has provided wonderful opportunities for people that are looking to finance start-up businesses. While I haven’t applied for any loans in the last few years, I have heavily considered investing in the Peer-to-Peer lending market. The returns have just been impressive!
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