Interior renovations in the Show-Me State, especially a total kitchen makeover or an unfinished basement remodel in Kansas City, can set you back over $35,000. If you are like most homeowners who do not have that much cash lying around, you will have to seek financing to fund your project. Fortunately, you are no longer limited to traditional personal loans, or high-interest secured loans if you have bad credit, to finance your home improvement.
Peer-to-peer lending is an alternative to conventional financing options should seriously consider. The qualities below separate it from the usual sources of funds:
Credit Integrity
Shopping for a P2P loan will not affect your credit at the time of application. In other words, you can learn about the interest rates you qualify for without consequence.
A fintech company behind the P2P lending marketplace could assess the creditworthiness of prospective borrowers without negatively impacting their credit scores.
This benefit is enormous, especially if you have bad credit. Considering that a hard pull will slightly lower your credit score (and stay on your file for about next 24 months), you can minimize your risk as a borrower and increase your chances of snagging a favorable interest rate.
Affordability
In addition to relatively low interest, you can employ any prepayment strategy without penalties. In other words, you are free to finish your P2P loan ahead of schedule to reduce your overall cost of borrowing.
P2P lending is not without non-interest fees, but they are relatively few and minimal. Unlike traditional financial institutions, fintechs deal with less overhead since they operate almost exclusively online. As a result, they can pass the savings to their customers and offer more competitive fees.
Transparency
P2P lending platforms have a reputation for full disclosure. They charge fixed interest, provide a simplified computation of monthly repayments, and collect no hidden fees.
Transparency is a two-way street. While you do not have to use any asset as a security for the loan, investors also expect you to be sincere when talking about your credentials and the purpose of the loan.
Speed
P2P loan marketplaces are generally driven by artificial intelligence. This technology automates almost everything to shorten the time needed to wait for loan application approval or deny.
Since most, if not all, is done online, look for P2P lenders is wonderfully convenient. You can even witness investors transfer funds until your total loan amount request is achieved.
Security
As mentioned, a P2P loan unsecured more often than not. Without any collateral involved, running into financial distress during repayment would not turn your average lifestyle upside down. Of course, default on your loan will harm your credit over the long term and ruin your reputation on the platform.
Privacy
Yes, you need to provide details about your employment and income, but you can stay anonymous to P2P investors. Your lenders can’t reach you no matter what, so do not be afraid of any form of harassment in case you fail to repay.
P2P lending is not without risks, but it is worth the trouble. Start budgeting for your project, so you can begin asking the Internet for funds in no time.
