Good NestingProbably not, as getting a loan from such institutions with bad or fair credit can be challenging. You could get such a loan from a peer-to-peer lender like Prosper, though.
Here’s how.
It may seem unfair that lenders require good or excellent credit when giving out loans, but it’s easy to understand why they do it: Risk. If you have a low credit score due to missed or late payments in the past, that makes you a riskier borrower. As such, lenders may reject your loan applications or accept you and charge higher interest rates to absorb that added risk.
What’s one of the best options if you have a lower credit score and need a loan? A peer-to-peer lender like Prosper, as they work with borrowers who have less than perfect credit and can provide decent rates on their loans.
The Perks Of Peer-To-Peer Lending With Prosper
If you aren’t familiar with peer-to-peer lending or P2P loans, here’s how they work in a nutshell:
- The lender takes funds from multiple investors (your peers).
- The lender uses those funds to offer loans.
What’s the primary benefit of P2P lending? Besides the fact that it helps the lender gather significant funding via various sources and the investors can earn a return on their money, the primary benefit of P2P loans is that they are easier to get. Unlike traditional loans from banks or credit unions, a P2P lender like Prosper can loan you money with a lower credit score. How low can your score be? 600 is the minimum, putting you in the bad credit bracket many lenders shy away from. And if your score is below 600, you may still be in luck since Prosper accepts joint applicants. Convince a friend or family member with good credit to fill out a joint application with you, and that could be what you need to get approved for the loan.
The low barrier to entry is just one benefit of getting a loan from Prosper. Another is that you can get a significant lump sum of cash between $2,000 and $40,000 to cover a variety of expenses with next-day funding via direct bank deposit, such as:
- Weddings
- Vacations
- Car purchases
- Medical bills
- Debt consolidation
- Home improvements
Is a P2P personal loan from Prosper your only option with a low credit score? No, as you could get a payday loan. But here are the problems with such loans:
- You can only get up to $500.
- Repayment is expected from your next paycheck.
- APRs can exceed 400 percent.
That’s why a personal loan from Prosper is a much better option. As for how to repay the loan, you can enjoy fixed monthly payments over three or five years with no prepayment penalties. And as a bonus, your on-time payments can help build your credit.
How can you apply for a P2P loan from Prosper? Take the prequalification quiz here to see a rate and monthly payment estimate without a hard credit pull. Then, if you are ready to apply formally, your credit will be pulled, and you could receive a lending decision within minutes.
