A lending club is an online platform where you can get a personal loan without providing any collateral. A person in a lending club is given an opportunity to consolidate their debt without going through the degrading and complicated approval process involved in other lending sources.
With a change in times, getting a personal loan has become easier and lending clubs are recommendable for those borrowing for special needs. Going to the bank for an emergency loan is a practice that online lending platforms have replaced. It is as simple as getting the lending club login details on the site and meeting with the investors. The platform is suitable for those who responsibly make prompt repayments and have good financial history.
Here are some of the things you should know about lending Clubs:
1. How It Works
A lending club is an online platform that brings borrowers and investors together. This online transaction cannot work without having the site fully equipped with lending club login details for all parties involved. There is an online application form to be filled with all the individual details and the type of account required.
Borrowers are supposed to choose the amount of loan required and give a reason for requesting for the loan. The lending club evaluates the application and comes up with a rating that will lead to either approval or disapproval of the application. The investors have only two choices of either automated or manual investing.
2. Who Benefits
Lending clubs presents both pros and cons to the borrowers and also the investors. The fact that this online platform is clear, fast, reliable, affordable, and available makes its beneficial to the parties involved.
Benefits to the borrowers
Get quick loans with a lower interest rate than the credit card if you have a low debt ratio, stable income, and good credit.
Get unsecured loans to clear medical bills rather than use other collaterals.
Get quick loans for emergencies or home improvements.
Benefits to the Investors
It is a quick way of getting good returns apart from invests in the stock market.
An investor can open an account with the lending club using less money than they would require with brokers.
It is satisfying to help others meet their needs and still make a good return.
3. What Investors Should Know
It would be cheaper to open an account with a lending club than investing with the brokers. You have a choice either to get an automated kind of investing or a manual one. Here are some of the things that investors should remember:
- Lending Club loans do not necessarily correlate with the stock market.
- Lending clubs re-invests the auto-invest returns directly.
- As an investor, you can choose to invest in many loans to diversify the risk.
- Lending club fees are deducted from the proceedings.
- The loans are unsecured.
4. What Borrowers Should Know
Getting a loan from a lending club is easy and convenient than acquiring one from the bank. One should be a responsible borrower and also know that timely payments help one increase their credit limits. Before you key in your lending club login details and request for a loan, here are some things to remember:
There is no prepayment penalty so you can pay your loan at any time.
Other creditors will only know you requested for a loan when you accept the offer and a hard credited inquiry conducted.
- Lending clubs are transparent with zero hidden charges.
- An origination fee accompanies every loan issued.
- If you pay your loan through a cheque, you attract a processing fee.
Lending clubs provides a peer to peer lending platform for borrowers and investors with just but simple lending club login details. As a borrower, this is an easy way of getting a loan as bank loans have discouraging long processes and requirements. Investors are also not left out as this is a good opportunity to invest as compared to that of bonds, stocks, or money market accounts.