If you have a FICO credit score below 630, then you have joined the throngs of Americans suffering from bad credit. Whatever curveball life has thrown to land you with that score, you needn’t give up hope. Debt consolidation is a legitimate path for those seeking to improve their situation, and in the short-term, personal loans can help with any unexpected or large expenses.
But you’ve learned this lesson the hard way: you need to be careful with your finances. That includes choosing a loan and a lender to fit your situation.
Investigate Your Lender
The internet is rife with scams and traps, but you can avoid becoming a victim with proper due diligence. Start by ensuring the lender you are researching is licensed to work in your state by contacting your state’s financial institution regulatory bureau.
Next, ensure their web address starts with “Https” instead of the standard “Http.” This indicates the site will securely protect your information and be difficult to compromise. Once you know the business side is secure, take a look at their customer service. Are they transparent in their fees and terms? Read through the fine print. Legitimate lenders won’t ask for fees up front; most will work any origination fees from your loan bill, so your monthly bill is all you pay.
Know the Difference Between Secured and Unsecured
An Unsecured Loan means the lender is taking you at your word. You sign a contract promising to pay. If you have trouble with payments, they may seek the assistance of a collection agency or possible legal action.
A Secured Loan means the lender wants something more solid; a piece of your property is offered for collateral. If you can’t pay, they can legally seize the property and sell it to recoup their losses.
Watch the Big Picture
While Title Loans and PayDay loans may tempt you with flashy advertisements and smiling faces, many of these companies are predatory and can lead to even worse credit in the future.
The safer option is to choose between a credit union or a highly rated online lender to help with your situation. Take into account their various interest rates and monthly payment plans. You should also ask if they report on-time payments to the credit bureau, as this will help improve your score over time.
Taking the Next Steps
Bad credit doesn’t have to ruin your future— even the most damaged scores can be rebuilt. While debt consolidation and personal loans help, the first step is to form good habits.
Keep careful track of your budget, and know what payments are feasible for you. Find a lender who can work on your terms instead of making you conform to theirs. Finally, only work with companies who offer soft credit checks. Hard credit checks cause further harm to your score, and no credit checks are a red flag for predatory behavior. If you don’t know your score, consider soft checking through services such as CreditKarma or NerdWallet to avoid penalizing hard checks later.
A good deal of individuals have considered consolidation loans to address their credit difficulties. However, not everybody is going to reap the benefits. In some cases it might be an effective way to escape debt, it’s not always the correct, nor best, solution for everybody. There’s no one simple formula to escape debt. This is the reason you will need to examine your financial options carefully so that you can make the best choice for you and your family.
There are numerous financing options to pick from. A debt consolidation loan is simply one of the options you have. We suggest conducting comprehensive research into each financial avenue so that you can best determine which one is the best answer for your debt and fiscal circumstance. If you choose correctly, you’ll discover that getting out of debt will become simpler. But if you pick the incorrect option, it is going to be more challenging to complete the program. When that occurs, you might wind up having a very hard time finishing your debt payments.
This is why it’s extremely important to decide if debt consolidation is a good idea or a bad path to take. While it looks like the ideal way for you to escape debt, you will need to be sure your finances and one of a kind financial situation are the ideal fit for it.
Common Reasons to Look into Debt Consolidation:
Before you decide if this is a bad or good idea, let’s attempt to understand why debt consolidation is necessary in the first location. There are three primary reasons why you need to use debt consolidation loan.
To “consolidate” several debts. As the name implies, this sort of financial option can allow you to consolidate any number of outstanding debts. You may borrow a loan that’s large enough to pay off your multiple debts. When the creditor approves, they will arrange to cover your original debts. After that, you’ll be left with one large loan. It makes the repayment easier as you’ll now be left with only 1 debt to pay off every month. Monitoring the payment won’t be as confusing and hard to monitor.
To lower the rate of interest. Another reason to consolidate debt would be to decrease the rate of interest. This is why this is a excellent debt solution for multiple credit card debt. For those who have a variable rate and the market show signs it is going to increase the prices, you can catch the opportunity to change to a fixed speed.
To improve payment conditions. If you would like to switch to another lender who doesn’t charge numerous fees, you may be better off with this new creditor. Another improvement which you could opt for is the repayment period. If you wish to save money by paying interest, you might want to reevaluate your payment period. The shorter term means you’ve got to pay a larger amount each month but that would decrease the interest which will accrue on the loan. But if you would like to decrease your monthly payment, then you can opt for a loan which lets you extend your repayment period. This will disperse your balance within a longer term to reach the lower monthly payment which will provide you more space in the budget.
When is it a bad idea
Additionally, there are certain signs that will let you know that debt consolidation is a terrible idea.
If you’re going to use it as the sole debt solution. As previously mentioned, debt consolidation loan is only going to solve half of your problem. It only makes your repayment simpler and easier to complete. But it won’t put a stop to the reason for debt. Consolidating the debt doesn’t mean it’s already repaid. You will need to know what you will do in order to pay back the debt. That means coming up with a different debt solution to totally pay off all of your credit obligations.
If you can’t control your spending habits. Among the dangers of debt consolidation is that are going to have a false sense of debt liberty. You believe you paid off your loans. That could lead one to believe you could already use credit. If you can’t control your spending habits, it’ll be simple to give into the temptation to utilize debt once again.
If you’ll wind up getting a higher rate of interest. It doesn’t make sense to borrow a loan which will provide you a higher rate of interest. Why would you need to invest more on the loan? Sometimes, you find yourself getting a higher interest rate due to a bad credit history. Once it’s high again, you may apply for a different debt consolidation loan and your enhanced score can help you to get better rates.
If you would like space in your budget to spend more. Finally, it’s a terrible idea to consolidate debt with a loan if you’re only doing it so you’ll have more space in your budget to spend more. Some people have credit card debts and choose to combine them under a loan so that they can use their cards on additional expenses.
It’s necessary to read through researched debt consolidation reviews so you’ll find a sense of how this debt solution works. It can allow you to get the opinion and real experience of customers who used a debt consolidation loan to get out of their credit problems.
Which are the top debts to unite under a debt consolidation loan?
The reality is, you may use debt consolidation loan for combine all kinds of debt. But, there are debts which are best suited to this debt solution. Here are the three greatest debts to consolidate through financing.
These cards have a reputation for having really high-interest prices. This is the reason why most individuals want to convert this debt into a loan — that has a lower rate. Rather than fighting to pay just the minimum, consolidating multiple credit cards to a loan with a lower rate appears like the ideal way to save money. The money that’s being spent on the high-interest amount can be used to repay the principal balance.
Another debt which you could consolidate is a private loan. In case you’ve got a very good credit score or if the rate of interest in the market is presently low, then you may elect to consolidate this debt so that you can benefit from a lower rate. So long as this debt doesn’t have a prepayment penalty, it may be a part of your debt list for consolidation.
Finally, you may even consolidate any medical debt which you’ve incurred. There’s actually no other advantage than having an easier time repaying your medical care costs. The thing is, you’ve just gone through a significant emergency. You want to concentrate on getting better rather than stressing over your debts. By simplifying the repayment process, you won’t feel overly stressed about meeting your obligations every month.
While you are able to consolidate your house loan along with other debts, it’s not always advised. You’ll be turning your unsecured loans into a secured loan. Sometimes, if you’re consolidating for the wrong reasons, it may not be worthwhile. You could wind up losing your house in the procedure.
In the event your debt consolidation loan application is declined, you ought not ignore it. It deserves to be researched so that you can work out how to improve your financial position as a whole.
You’re not earning enough. The lender has to be shown proof which you can manage to pay back the loan. If not, then you want to search for a debt solution elsewhere. In actuality, you may be better off using a debt reduction or debt settlement. A debt consolidation loan may take a while to totally pay off so you’ve got to ensure you get a steady income to support it.
You can’t provide a collateral. Another reason for the loan to be denied is when you can’t provide a collateral. This is often for secured loans. There are instances when the lender will need this from you in case you’ve got a poor credit score. They would prefer to offer you a secured loan in order that they have something to liquidate in the event you are unable to pay off your loan.
You’ve got too much debt. You can’t borrow more than what they believe you’re capable of paying off.
You get a poor credit score. Finally, a great reason to be diminished of your debt consolidation loan is when you’ve got a poor credit score. A low score means you neglected to practice good payment habits. This makes you a speculative debtor. Lenders won’t go into company with the likes of you.
Which are the two choices to consolidate debt?
In case you believe that debt consolidation loan isn’t a good idea, don’t worry as there are still alternative to consolidate your debt with no new loan. In actuality, there are two choices for you.
This option involves the support of a credit counselor. You’ll meet with this counselor to talk about your particular debt and financial circumstance. This plan will be made to perfectly match your financial situation. If you will need a lower monthly payment, then your balance will be extended over a longer payment period. After producing the DMP, the credit counselor will introduce it to the various lenders and creditors that you owe money to. If they approve, you’ll be notified by the credit counselor. You will them send the entire monthly sum to the counselor and they’ll be responsible for disbursing that sum towards the creditors and lenders on your list. This will make things easier for you and it won’t involve getting a new loan. You only need to pay a small amount to the credit counselor — about $50 per month. There’s also a one-time registration fee that’s around $75.
If it’s debt reduction that you want, then this is the choice that you wish to use. This involves negotiating with your creditors and creditors in order that they enable you to pay just some of what you owe. This process can be carried out with a skilled but it’s also something which you can accomplish yourself. But if you feel like you can’t negotiate with your creditors and creditors correctly, you might want to hire an expert to assist you.
It’s important that you consider the choice of using debt consolidation loans. Bear in mind that there’s a particular option that’s most appropriate for your debt and fiscal circumstance. Be sure that your choice is going to be a debt solution which you can complete.
Consolidating your federal student loan with a private lender can help you to reduce the interest rate that you pay and save money. To qualify, you need to have a credit score somewhere in the middle 600s range. The following are the top three online lenders that offer refinancing for federal student loans.
Sofi can refinance a federal student loan at a fixed or variable rate. The fixed rate starts from 3.35% to 7.125% while the variable rate starts from 2.815% – 6.74%. Applying for Sofi loan online is completely free. You also don’t have to pay any origination fee if the loan gets approved. If you suddenly lose your job, you can enter the unemployment protection program and stop making loan payment until you find a job.
To refinance your loan with Sofi, you must first fill in a short online form to see if you can get preapproved for the loan. If you get preapproved, you will receive an email on different loan options including monthly payment, APR interest, and loan term. After you have selected a loan offer, you can upload screenshots of your important documents. You can use your smartphone to take photo of your documents and send them as attachment to Sofi.
Earnest offers refinancing for the federal PLUS loans at a reasonable fixed or variable rate. The fixed rate for the student loan refinancing ranges from 3.35% – 6.39% while the variable rate for the student loan ranges from 2.57% – 6.19%. With Earnest, you can refinance a student loan balance from $5,000 – $500,000 and repay back within a period of 5 – 20 years.
Earnest does not have any minimum qualification for the credit score and income. They do require the applicant to be taking a degree course from a Title IV accredited school. You can also apply for student loan refinancing with Earnest if you want to graduate this semester. Apart from that, you also must be employed or already receive a job offer in which you will start working in 6 months. Earnest offer many flexible payment options such as extend a due date by 7 days, skip a payment every 12 months, and change in between fixed and variable rate every 6 months.
3. Education Loan Finance (Elfi)
Education Loan Finance (Elfi) offers student loan refinancing via the SouthEast Bank that is based in Tennessee. Elfi started to offer student refinancing loans in December of 2015. Elfi student refinancing loans are available on a fixed rate (3.19% – 6.69%) and variable rate (2.49% – 6.01%). There are several loan term options from 5 – 20 years if you are a student applying the loan. If you are a parent applying for the loan for your child, you can choose a loan term from 5 – 10 years. Elfi loans can be used to refinance a student loan of $15,000 and above. There is no limit on how much student loan you can refinance with Elfi.
If you have borrowed money on high-interest unsecured loans, you can reduce your burden by consolidating them with a low-interest personal loan. In this way, you will only have to make a single payment and you’ll also save a lot of interest fees that you could have paid if you continue paying the loan the traditional way. The following are four flexible lenders that offer personal loans for debt consolidation.
1. Lending Club
Lending Club is a p2p lender that only requires the borrowers to have a minimum credit score. The loan term is in between 3 – 5 years even though most borrowers at Lending Club are on a loan with 2 years loan term. Lending Club is available to residents who live in 48 states. For each loan that gets approved, they collect origination fee. The average interest rate for the p2p loan that Lending Club offers is 5.99% – 35.89%.
Prosper is another p2p lender that offer debt consolidation personal loans for borrowers with credit score as low as 640. Prosper offers personal loans with loan amount from $2,000 – $35,000 and APR interest from 5.99% – 35.97%. You can choose from 2 repayment terms including 3 and 5 years. Prosper personal loans is available in 47 states. The three states where Prosper loan is not available are Iowa, Maine and North Dakota. You have to wait for more than 1 week for the loan to be funded.
3. Best Egg
Best Egg is a flexible online lender that accept borrowers with a minimum credit score of 640. The typical APR for Best Egg loan is from 5.99% – 29.99%. With Best Egg, you can apply for a loan amount from $2,000 – $35,000 and choose from a loan term from 3 – 5 years. Only a few qualifying borrowers can get a loan of up to $50,000. Your loan can be funded in as fast as the next business day. The APR interest range for a Best Egg personal loan is from 5.99% – 29.99%.
Marcus requires its borrowers to only have a minimum credit score of 660 plus you must maintain a 3 years credit history. Marcus loans is ideal for use in debt consolidation because it does not charge unnecessary fees like late, early repayment and origination fees. Residents in all states can apply for Marcus loans except the residents in Maryland. Marcus provides flexible loans with loan amount starting from $3,500 – $30,000 and the loan term from 36 months to 72 months. You can get an interest rate from 6.99% – 23.99% for Marcus personal loans. It takes 2 business days for an approved Marcus loan to get funded.
Most of the online loans will require you to provide proof of your income and employment. It is important that you don’t lie about your income and employment on the loan application because the lender will check it. The lender usually will verify this information prior to the closing date of the loan.
The lender will attempt to make a phone call to your employer and find out whether you really work there and the salary that you receive. Sometimes, the lender will not call the employer to obtain the information. Instead, they simply require the employer to forward the information to a fax machine. Many online lenders also require the applicants to show proof of the pay stub.
The pay stub proof is submitted by applicants who are working with an employer. If you are self-employed, you need to produce proof of an income tax return for at least one year. They may also want you to provide a copy of your business registration license. There can be obstacles when you are trying to get your employment verified. For example, the human resource department in the company you are working can be slow in completing the verification. Some lenders use software to verify the employment of the applicants. If the information your employer provides is different than the information you enter in the application form, the lender will prefer to use the information your employer provided.
Lenders want to know important employment information for example when you start the job. If you are on a job contract, they will want to know the termination date. You will have to provide information about your employers such as employer’s name, phone number and office address so that the lender can quickly obtain your employment information.
Differences in the income information you provide and the income information your employer provide can result in a higher cost for the loan such as higher interest rate and lesser borrowing power. Lenders want to approve loan application of applicants who are likely to remain on their job for 3 – 5 years. They will check to see if you have lost your job recently or that you constantly change your job. It is likely that the lender will not approve the loan if the employer foresees that you will quit your job in the near future.
Self-employed applicants are required to fill in the IRS Form 4506-T. You must attach a copy of the IRS tax return for the past year along with the form. The lender can also go ahead to verify the information with your accountant. Before they approve the loan, they also want to know how long your business will continue to stay successful.
Many people in Virginia are turning to credit unions when they want to apply for a new loan because they know that the APR interest rates at the credit union are amongst the lowest. You can usually get a decision within a few days when you apply for the personal loan from the credit union in Virginia. The following are the top 4 credit unions that offer short term loans in Virginia.
1. Navy Federal Credit Union
Navy Federal Credit Union is a credit union based in Vienna, Virginia. The credit union was founded by a few navy employees on the 17th January 1933. Navy Federal Credit Union has a membership base of around 7 million and total assets of more than $81 millions. Navy Federal Credit Union offers personal loans with a maximum loan amount of up to $50,000. If the loan is to be used for home improvement, the loan term can be longer than 60 months. For loans with 61-84 months, the minimum loan amount is $25,000. If you want to take out a loan with 84-180 months repayment term, the minimum loan amount that you must borrow is $30,000.
2. PenFed Credit Union
PenFed credit union in Virginia was founded in 1935 and it serves residents in 50 states in the USA and District of Columbia. The penfed credit union is one of the biggest credit unions in Virginia with a total asset of $23 billion and a large membership base that consists of more than 1.5 millions members. The PenFed Credit Union offers personal loans with a minimum loan amount of $500 and a maximum loan amount of $25,000. The APR interest rate starts from 9.99% regardless of the loan term you choose. There are 3 repayment periods to choose from including 36, 48, and 60 months. The minimum monthly payment for all loans is $50.
3. Northwest Federal Credit Union Foundation
Northwest Federal Credit Union Foundation (NWFCU Foundation) was originally established to serve the employees of Central Intelligence Agency in 1947. NWFCU’s lifestyle and personal loan is available with a loan term of up to 84 months. If the loan term is 1 year, the minimum loan amount for the personal loan is $500. If the loan term is 25 – 60 months, the minimum loan amount that must be applied is $3,000. The APR interest for NWFCU personal loan starts from 10.65%. The maximum loan amount that you can apply for the NWFCU personal and lifestyle loan is $25,000 and the maximum length of the repayment period is 7 years.
4. Apple Credit Union
Apple Credit Union is a non for profit credit union founded by 10 educators from Fairfax County Public School in 1956. It has over 20 branches in the Northern Virginia area. Apple Credit Union offers signature loan with a maximum loan amount of $50,000 and a loan term of up to 60 months. It has a simple application process and it does not charge any early repayment penalty fee. The APR interest for the signature loan at Apple Credit Union starts from as low as 8.99%.
Rocket Loans offers a bigger loan amount compared to Goldman Sachs’ Marcus loan. Rocket Loans can approve a loan amount in between $2,000 and $35,000 with a loan term that ranges from 36-60 months. The actual amount of loan that you will be approved is determined by the income level and the number of existing loans that you already have. The interest rate range of Rocket Loans is from 5.893% – 28.99%. The interest rate that you are assigned not just depend on your credit score but it also depend on a number of factors such as monthly salary, debt to income ratio, the number of loans you recently apply, and etc.
You can get preapproved for a Rocket Loans and it will not cause any problem to your credit score. To get preapproved, you must provide basic personal information like SSN, name and address. The preapproval process will perform a soft credit inquiry to retrieve the interest rate. It will only perform a hard inquiry when you submit the real loan application. The origination fee for Rocket Loans varies in between 1%-6%. The origination fee is already deducted from the loan amount when the loan is released to the borrower. Rocket Loans only takes a few minutes to review your loan. If the loan application is approved, you can expect to see the fund in your checking account in 1 – 3 days.
Goldman Sachs introduced Marcus line of personal loans that offers a minimum loan amount of $3,500 and a maximum loan amount of $30,000. The advantage of Marcus loan is that it does not have any fee including application, origination, early payment and late payment fees. No fee is charged on a returned check. Marcus loans is introduced after a survey that involves more than 10,000 customers was carried out. You must first get preapproved for the loan to find out the loan amount that you are allowed to borrow and how much is the amount you are responsible for paying every month. It is free to get preapproved for Goldman Sachs’ Marcus loan.
Once you are preapproved, you will be asked to provide further information such as payslip, and bank statement. You have the option of choosing the loan term. The loan term varies in between 2 – 6 years. The longer the loan term you choose, the higher the interest APR of the Marcus loan will be. The interest rate for Marcus loan starts from as low as 5.99% and can reach up to a maximum of 22.99%. Applicants with excellent credit score will be able to qualify for the lowest interest APR. You must have a minimum credit score of 640 to get approved for the Marcus loan.
The Consumer Financial Protection Bureau (CFPB) has proposed a rule that will impose several terms on payday loan lenders in June of last year. The purpose of the rule proposal is to prevent people from getting trapped in payday loan debt cycle. The rule requires the lenders to follow a set of strict rules in assessing the borrowers’ abilities to repay the loan. The problem with the rule is that it will make it very difficult for the payday loan to get approved for desperate people who are in need of the money to save them in emergency circumstances.
The CFPB was established under the Dodd-Frank Act. President Trump has vowed to repeal Dodd-Frank several times from the time during his campaign up until now. There is not yet any confirmation but it is likely that President Trump will attempt to remove all the regulations that CFPB have proposed. This can only happen if it gains the approval from the congress houses to repeal CFPB and the republicans are in charged of both houses.
Some people have speculated that President Trump will take over the place of the CFPB director called Richard Corday, originally, the director can only be fired if he did not conduct his duties properly. Despite that, the court later ruled that the president has the authority to fire the director of the CFPB for any reason. Corday’s term as the director of CFPB will come to an end in 2018. One way to prevent the rule from being implemented is that it may not be finalized. If he steps down, a nominee chosen by President Trump will take his place. The nominee will not give the finalization on the rule so that it cannot be implemented. It is up to President Trump to replace him sooner if he wants.
The congressional republicans can repeal the rule imposed on payday loan lenders through the Congressional Review Act if Richard Corday continues to be the director. In this way, the House and Senate can vote against each other. If most of the votes fall on the Senate, it will be able to prevent the payday loans regulation from being implemented. Repealing the proposed regulations will be advantageous not only to payday loan lenders but also on short term loans and bad credit loans.
It can also put an end to the small dollar loans that are typically offered by credit unions and community banks. The reason is that the CFPB requires complicated underwriting requirement on the small dollar loans. President Trump did not put the CFPB agency on his priority list but many experts have speculated that the agency will come to his attention within a short period of time.
The typical repayment period for a short term installment loan is 1 – 5 years. The interest rate that you are charged will determine how much you are expected to pay back every month. The interest rate in a longer loan term will be higher even though the monthly payment is low. If you can pay more every month for the loan, you should choose a shorter loan term as this will help you save money on the interest fee in the long run.
The interest rate can be a fixed rate where the interest rate is locked so that you pay the same interest rate throughout the entire loan term. It can also be a variable rate where the interest fee you pay will depend on its fluctuation in the loan term. There are also two types of short term installment loans including secured and unsecured loans. Unsecured loans is better because you don’t have to use your property as a security deposit. In secured loans, the lender has the right to auction off your property in case you are several months behind in making repayment for your loan.
You will be debt free faster when you choose a shorter loan term. There is always the possibility that you want to repay the loan in full before the end of the loan term. Therefore, it is best to look for a personal loan that does not charge any prepayment penalty fee. Prepayment penalty fee is a type of fee that the creditor charges onto the borrower who want to repay the loan early.
When choosing a loan term, you must ask yourself how many years do you need to take to repay your loan. You should also ask yourself how frequently you want to make the repayment. Many creditors allow the borrowers to choose the repayment date. You can choose the repayment date to be weekly or monthly. It is important that you know all the fees and charges that you are supposed to pay for borrowing the loan.
Most creditors offers personal loans with a loan amount that range from $1,000 – $35,000. Some creditors offers personal loans as much as $50,000. You should only borrow the amount you need for covering your expenses. The financial institution site may have a borrowing calculator that you can use to calculate your expenses of borrowing a certain loan amount.
You will be required to put down your signature on a credit contract that states the loan amount and loan term. It is important that you go through the credit contract and completely understand your duty as a borrower before putting down the signature. Before applying a loan, you must make sure that you can set aside the sum of money required to repay the loan every month.
Peer to peer lending marketplace is an online platform where individual lenders lend money to loan seekers. P2P lending system allows people to conveniently borrow the money they need in just a few clicks without having to wait for several months for the bank to approve their loans. Hundreds of peer to peer lending companies have launched in the USA but there are only a couple of leading P2P lending networks. The following are 6 leading P2P lending sites.
1. Lending Club
Lending Club is a popular P2P lending site established by Renaud Laplanche in the year of 2007. Up to date, it has offered more than $11 billion dollars worth of loan in 2007. The personal loans can be used for debt consolidation purposes or repaying the credit card debts. The funds from the P2P personal loans can also be used to repay temporary expenses for example start a business, investment, and hospital expenses. The loan amount that borrowers can apply for ranges from $1,000 -$35,000 and the interest range starts from 6.6%. people who want to borrow money for their business can apply for a loan of up to $300,000. Lending Club is the first publicly traded company with a capitalization that worth $5.14 billions.
PeerForm is a P2P lending platform founded by the executives in WallStreet in 2010. It offers P2P loans of between $1,000 – $25,000 in a loan term that lasts for 3 years. The interest rate that is assigned to the borrowers range from 7.12% – 29.99%. The advantage of PeerForm is that it can offer loan for people with credit score as low as 600.
3. CircleBack Lending
CircleBack Lending offers P2P loans starting from $3,000 -$35,000 that is to be repaid back in 3 – 5 years. The lowest interest rate at CircleBack starts from 6.63% and the interest rate can increase up to as high as 36%. CircleBack offers small loans on a variety of purposes including wedding, engagement ring, car, motorcycle and boat.
4. Prosper Marketplace
Prosper Marketplace is the first P2P network to be established in the USA. Up to date, it has issued more than $4 billions loans to at least 250,000 people. The loan amount ranges from $2,000 – $35,000. the interest rate starts from as low as 5.99% and can reach up to 36%.
Sofi is a P2P network that focuses on offering student loans and mortgage loans. The loan amount starts from $5,000 and you can borrow up to $100,000. they take into account the accreditation of your school for student loan application. Other factors that are taken into account are financial history, experience in the job, and employability.
6. Funding Circle
Funding Circle is another leading P2P network that has issued more than $1 billions in loans to 8,000 businesses around the world. Most of the investors in Funding Circle are retail companies, banks and financial institutions. The minimum amount of loan you can apply is $25,000 and the highest loan you can apply for is $500,000.