Peer-to-Peer (P2P) Lending is a financing platform that is becoming increasingly popular among investors and small time business owners. Many individuals are realizing the benefits of its anonymity and ease, matching borrowers and lenders through a digital system less the hassle and complexity of traditional lending platforms.
P2P lending allows borrowers to get access to their needed financing whether it is to consolidate debt, fund a small business, purchase a car, or improve their homes. If getting a motorcycle loan is what you need and you prefer to opt out of traditional lending transactions as much as possible, P2P could be the solution you’re looking for.
Peer-to-peer lending, also more commonly referred to as person-to-person lending is a financing platform that uses complex computer algorithms to match lenders and borrowers anonymously. With P2P, you can a) borrow as much as $1,000 to $40,000 or higher if your loan purpose is to fund business, for instance; b) pay off loan from 12 to 60 months; and c) pay automatically using automatic payment deductions from your verified bank accounts.
Because P2P holds no physical existence, the cost of transaction is lower compared to traditional lending. These platforms began emerging over a decade ago, gradually changing the way lending is done.
P2P Lending Pros
Choosing a P2P Lender for your motorcycle financing could give you the following advantages:
- Quick and simple application process. Fill out forms and submit at the touch of a button.
- Checking your interest rate will not give a negative impact on your credit score.
- Access to interest rates that are lower than those offered by traditional credit sources and banking institutions.
- Your monthly payment is fixed without the fear of hidden fees.
- No contact necessary with your lenders; everything is transacted via the web.
- No prepayment penalties.
- No collateral needed.
- Access to consecutive P2P loans very viable if previous loans have been handled responsibly.
Cons of P2P Lending
However, not all is bright and shiny in the P2P lending universe. Disadvantages always exist in every platform and in the case of P2Ps, you are also at the risk of:
- Getting high interest loans if you have bad credit. Although low interest rates is also one of the touted benefits of P2P, rates will still be dependent on the risks involved and the borrower’s credit standing is a primary indication of that risk. Before you apply, it is better to build your credit first and you’ll have a higher possibility of getting the loan you need. P2P might be a different platform, but it still upholds the standards of traditional lenders when it comes to dealing with risks.
- Not getting another P2P loan if you have badly handled your last loan. Even if P2P loans are unsecured, that does not mean it cannot damage your credit score if you go delinquent on your payments. What’s worse is that most lenders and investors will shy away from people who have negative history on P2P loans, so if you manage your P2P debt irresponsibly, you also ruin your chances of getting access to other P2P loans in the future.
If you’re eyeing a P2P loan to finance the purchase of your motorcycle, see to it that you prepare right. Determine your current credit score, and work on it as much as possible. To apply, you must:
- be at least 18 years of age, a US citizen and a permanent resident or a long-term visa holder
- have a valid social security number
- have a verified bank account which will be used to automatically pay for your debt on a monthly basis
P2P lending could be the answer to your most needed motorcycle financing. Apply today!