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View Full Version : Is peer to peer lending better than getting a loan from a bank?



Rainman
02-06-2014, 05:04 AM
A number of firms in the past have popped up which serve the same functions as banks but are more friendlier to members in terms of interest rates earned [for those who invest their money with them] and low interest rates charged [for those who borrow money from them]. This could be great for someone looking for a fast way to get capital to start a business but these peer to peer lending networks/firms/sites etc, being relatively new it's hard to tell if what they say is true or if they have the same operating policies as loan sharks.

Question is: is it safe to borrow money from peer to peer lending sites/firms?

Lodismel
02-06-2014, 01:05 PM
I would really be careful with this one. There are a lot of people out there who are just trying to scam somebody and get away with their money. It's better to go with tried and true methods in my opinion. When it's something like your livelihood it's better to take as few risks as possible.

AlecD
02-06-2014, 01:52 PM
I would really be careful with this one. There are a lot of people out there who are just trying to scam somebody and get away with their money. It's better to go with tried and true methods in my opinion. When it's something like your livelihood it's better to take as few risks as possible.


I would really be careful with this one. There are a lot of people out there who are just trying to scam somebody and get away with their money. It's better to go with tried and true methods in my opinion. When it's something like your livelihood it's better to take as few risks as possible.

While it is true that taking few risks help to ensure your longevity, nothing in life is guaranteed. On the other end of the spectrum, certain risks allow for jumping ahead much faster financially. You really do have to find the perfect balance. Hell, one of us could get hit by a bus tomorrow for walking outside. Does that stop us from leaving the house? Some of us, yes. But most of us? No, because if we didn't leave the house how would we continue to accomplish and move forward? Risks are a necessary part of business in my opinion.

mikka254
02-06-2014, 03:50 PM
They are loan sharks with a twist. Like when you see toothpaste written herbal on the side and then they increase the price by five cents. What I would advice you is to look for investors instead of trying to get a loan. If something looks too good to be true, it usually is.

Bonyi
02-07-2014, 03:29 AM
Yes in my opinion, getting money from peers is far better than taking a loan from a bank. Banks will always ask you for high interest. But on the other hand, peers will likely not ask you for interest but will entrust you based on your relationship. It is wise to get capital from friends or peer you know will grant you loan.

delusional
02-07-2014, 12:10 PM
I really don't think so. It can seriously mess up relationships. And if by peers you mean other people but not really your family, I would also say no. It's better to be protected by the law when you are lending a large amount of money.

Taru
02-07-2014, 12:30 PM
I've never tried it, but if you are unsure, I'd suggest just starting first with a minimal amount just to test it out, otherwise I think you'd probably still be safer with a bank where all the policies are well spelled out. Again, this is just a guess from me, I'm just saying it's probably how I would go about it. I also agree with delusional, I think it might be best to try out other less risky options first like finding investors or even try out crowdfunding. They all pretty much require the same amount of planning anyway, at least with crowdfunding the risks are spread out among a lot of investors, and the transparency aspect of it also helps making the plans a lot clearer in my opinion.

AlecD
02-07-2014, 02:33 PM
Banks are nice, yeah, but not everybody has good credit. Really, if you are able to get a loan from a bank then avoid peer-lending. If your credit isn't the best then peer lending becomes your only option. It's really situation-dependent as to which is the best option.

DomDom
02-07-2014, 02:44 PM
In addition to everything said, really go through your business plan before taking any credit (if your credit score is low there is a reason why). Be smart about it, if the idea is not good enough the best thing sometimes is just to walk away.

Bakerpat
02-07-2014, 03:38 PM
Peer to Peer my be more trouble than you would like to get involved in. There are several new type of loan alternatives to help with the credit situations. They loan on the amount of monthly receivables not credit score. One such business is Sunovis a branch of a larger company.

rijndael
02-07-2014, 03:46 PM
Yes, as others have said, be careful. IMO, it all comes down to trust. Does the "peer" have a good track record that can be verified? Does the website have other public reviews out there than you can read to make sure others are having a good experiences? These are questions I would ask myself if I was looking into peer to peer financing.

pandandesign
02-07-2014, 03:57 PM
I would think to be on the safe side, getting a loan from a bank is much better because although you won't get that much of an interest as high as going for peer-to-peer, but it's much safe and reliable when getting a loan from the bank. I would say you will get a higher interest with the bank and you have to have a good credit. I don't really trust the peer-to-peer lending, which I think unless you know about it, otherwise I would suggest you for with the bank.

gHiros
02-08-2014, 01:14 AM
I think "peer-to-peer" lending can be a viable option if you need cash and you're having difficulty securing a loan from any bank. There are legitimate programs out there, like Prosper and The Lending Company. Everything is handled online, and as long as your business plan makes sense, you will get the money from the multitude of members in such programs. I borrowed money from Prosper, and the whole process went smoothly, from requesting the loan, getting approved, to getting the money, and finally paying back the loan. Good luck!

themusicchamber
02-08-2014, 01:57 AM
Yes, peer to peer lending is better in any condition as they may give for less interest and for ling time and will compromise even if you ask for some more time, they can waive off some interest also if you show your problems and be friendly with them and the main thing is you will not get burden of big amount.

Spiff
02-08-2014, 03:12 AM
I have been researching this and I would say that it depends on the amount of money that you want to borrow. I personally am not a very trusting person and so, when I take out the money to start my business, I am going to go with a bank. Hands down, this is the safest option and I recommend you to do the same if you can. I have done transactions on the internet so many times before, and there are a lot of bad scams and other things going on that it's insane to trust anyone nowadays. I have been scammed by a company who had over 900 vouches from many different people but once a large sum of money was put into the equation, the owner suddenly became a very greedy and untrustworthy person. You would think that since they would be the one sending you the money first, it would be easier to trust them since you are the one asking for the loan. Still, be extremely cautious and careful. If you do decide to go with something like this, give yourself a few days or weeks even to research the place or people that you borrow the money from.

Francisco23
02-11-2014, 04:51 PM
I've never heard of them before. Your post is an eye-opener. I totally don't trust any kind of site that requires you to have to release funds to others, except it be that you are donating the sum of money.

owesem75
02-12-2014, 06:01 AM
If this peer-to-peer lending institutions are labelled as a legitimate "Cooperative / Microfinance" organization fully regulated and/or monitored by the government with detailed and transparent regulations as well as accept accountabilities, then I agree that this is a very good source of quick financing for your business. Otherwise, I would be careful in doing transactions with these groups. Be very careful.

crimsonghost747
02-12-2014, 11:21 AM
If you need the money: no. The interest rate will always be a lot higher than with a bank.
If you want to lend money to someone else: maybe. Higher interest but also a big risk of them not paying.

mikka254
02-13-2014, 03:10 PM
Yes in my opinion, getting money from peers is far better than taking a loan from a bank. Banks will always ask you for high interest. But on the other hand, peers will likely not ask you for interest but will entrust you based on your relationship. It is wise to get capital from friends or peer you know will grant you loan.

From a business point of view, it might seem like no interest is the best option but the loan will damage the friendship even if you pay back the loan on time.

elisagrace
12-24-2015, 05:19 AM
Hi,
According to me, Getting money from peer to peer is better due to the following reasons:-
Short term access to your money
No lender fees
Fair rate of interest
Thanks!!

elisagrace
12-26-2015, 12:11 AM
As the economy is growing, it is creating a new challenge for everyone, small and big business man. Peer-To-Peer (p2p) concept is growing at a faster pace, resulting in billion dollar projects. This concept means, that if you donít want to take a loan from the bank, you can simply take money from those who are willing to give or lend money. But, it depends which company you choose for this purpose. So that, you attain maximum benefits with success! For my business, I took a loan from merchant cash USA, Henderson, Nevada. And, it really worked for me. so, you may consider it for reference!

Malik Suleman
12-28-2015, 02:28 PM
peer to peer landing is the best choice

andrew2510
03-23-2018, 07:06 PM
I wouldn't really call it an investment, but that's not saying that it's necessarily bad. I would agree that it's more similar to gambling, though, and it should at the very least be treated as such. I'd only recommend spending some spare change on it and nothing more. I think it would be better to spend majority of your investment capital somewhere a little more stable.

fillidave
05-31-2018, 12:47 PM
I think the best place to start, and get the info you need would be the U.S Small Business Administration (link: http://b7y.us/SBALoanOptions). If you need a quick guide as to how the process works heres a good article: http://b7y.us/SmlBizLoansHow2INC

PaulJFields
06-12-2018, 05:57 AM
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DanaBShield
06-12-2018, 06:11 AM
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09-14-2018, 07:32 AM
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BFT PUMPS
03-04-2020, 11:42 AM
With a bank loan, you get the stability of borrowing from a well-known institution and your rates and terms may be a bit lower, especially if you have good credit.Getting a traditional loan from a bank is a better option.