It is getting even harder to obtain a loan from the bank nowadays. The bank has always used a conservative approach to decide whether to extend the loan to borrowers. Borrowers must meet a number of criteria and make sure every single document is submitted before the bank will give a loan decision. The bank will take 3 – 6 months to evaluate a loan request because they need to observe the borrower’s finance carefully.
Another reason is that the government is introducing more regulations on issuing of loans by the banks. The CFPB plays a key role in the regulation of the bank loans more recently. They introduced high fees to the bank which strip off their earnings of the banks and this forces them to limit the number of loans that they can issue. This is why many people are complaining that they can’t get a small loan nowadays even though they used to easily get approved for a bank loan in the past.
If you are having a problem getting a loan from the bank, you should consider applying a peer to peer loan on the internet. Peer to peer is different from a traditional bank in that the loan funded by individual investors. Banks often have minimum loan amount but P2P allows you to borrow just a small amount of money to fits your needs. In P2P, lenders will bid on your loan once you have posted the loan request up on the platform.
Since it is funded by individual investors, you can negotiate about the lending terms. Just like bank, the interest rates of a P2P loan can be either fixed or variable rate. P2p lenders tend to charge a lower interest and fees. They can also give you an estimate on the interest rate with a soft inquiry so that your credit score will not be impacted.
Bank loans may charge a fine called prepayment penalty if you try to pay it off early whereas most peer to peer loans do not charge any of such fees. With P2P loan, it is up to you to clear the loan whenever you have the money to do so. Individual lenders are more compassionate and they may post-bankruptcy ok at your post-bankruptcy you have a bad credit or in a post bankruptcy situation. If you are getting a business loan, the individual investor can take a look at other factors such as number of followers on your social media page. With P2P loan, the most important thing is that you must have a steady job and enough income to repay the loan. Peer to peer loan releases the funds faster than a bank and you can receive the funds in 1 – 2 weeks after approval.