How Peer-to-Peer Lending Can Save You From Debt

Living in debt is never easy. Managing multiple payments and dealing with numerous creditors takes its toll on a debtor and can affect the whole family. To make keeping on top of your debt more straightforward, debt consolidation can be a lifesaver. One of the more popular debt consolidation loan options of the moment is to use peer-to-peer lending.

 

Peer-to-peer lending, otherwise known as social lending, works by bringing individual savers and borrows together to get better rates on their spare cash or debts. Debt consolidation loans at Zopa bring together lenders from all walks of life, from students and young professionals to pensioners and business owners. Borrowers in need of low rate loans are matched with savers who want high interest rates on their savings – both can make the most of rates they may not normally receive through a traditional bank.

 

A debt consolidation loan is one of the easiest ways to reduce your total debt cost. By taking a lump sum loan you can immediately pay off all your outstanding debts, leaving just the cost of one loan repayment to worry about each month from there on. With just one repayment, household budgeting is simpler and the cost of your total debt will be cheaper too. When paying the minimum payment for individual credit cards or hire purchase each month, you may be dealing with just the interest element of each debt. As soon as you consolidate your debt, you will only need to pay one, lower, interest rate on the full amount.

 

Peer-to-peer lending enables access to cash without even setting foot in a bank – a relief for those who have had stressful experiences dealing with finance professionals in the past. There’s a real sense of community when borrowing from your peers, for those who just hate traditional banking, its ideal. However you need to remember that with peer to peer borrowing it’s not suitable for everyone as there are tight criteria to fill.

 

Lenders must have a good track record of repaying debt in the past and need to be able to prove identity and a UK address history for at least 3 years. Using social lending providers like Zopa, you can apply online and have a team of underwriters make a decision for you in just 24 hours. If your application is successful your loan can be paid directly via BACS within just 3 days.

 

A bit about Zopa Peer-to-Peer Lending

Zopa is the leading social lending service in the UK. Launched in 2005, to date they have lent over £434 million with over 45,000 active lenders signed up and 71,000 borrowers. Social lending, also called peer-to-peer lending which you see referenced above, is the practice of lending money to unrelated individuals, or theoretical peers, but without either the lender or the borrower going through a traditional financial intermediary such as a bank. Zopa are one of the UK’s leading peer to peer lending sites, matching individuals willing to loan money with borrowers looking to borrow money for things such as debt consolation.

Zopa were voted Moneywise’s ‘Most Trusted Personal Loan Provider’ for the past 4 years.

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