A personal loan is a great financial tool that can be used to jumpstart almost any plan. Personal loans can be put towards any purpose, unlike mortgages or car loans which can only be used for houses or cars.
If you are seeking a personal loan, a loan marketplace is a great place to look. A loan marketplace will automatically compare and filter through all of the available lending options to best fit your needs. With a marketplace, you will surely find the most competitive borrowing options and secure funding as quickly as possible.
How Does a Personal Loan Marketplace Work?
Personal loan marketplaces filter and search through a network of lenders to find you a match based on your preferences. Lenders include both traditional institutional lenders as well as individual investors willing to lend their money. Best of all, getting funding through a marketplace can be more accessible as many marketplaces like MoneyLion screen for more than just a credit score.
The Lending Process
The lending process on a marketplace varies slightly from the traditional process. To start, you will first need to find a marketplace online and then fill out the application. The application will help the platform better understand what you’re looking for to properly screen through its network of possible loans. Within a few seconds of handing in your application, the marketplace narrows down your search and shows your top quotes. From there, you can choose the loan that you think is best. Afterwards, all payments and transactions will be handled digitally by the platform.
Competitive Rates
Because marketplaces have a larger variety of lenders, you have a wider pool to choose from. Therefore, you will have a better chance at finding the most competitive interest rates. Interest rates are a big factor when choosing where to get a personal loan because the cost to borrow can make you save or lose money. Searching through different personal loan options and comparing rates can be extremely time consuming. A loan marketplace automates that research.
Get Funding Even With Low Credit
Thanks to personal loan marketplaces, even those with low credit have the opportunity to secure funding. Depending on what marketplace you are using will differentiate the factors screened for before getting approved for a loan. Some marketplaces offer no-credit-check loans, and others will look at both your credit history as well as other factors. If you have a low credit score but need a personal loan, a marketplace may be your best option.
Convenience
One of the biggest benefits to a personal loan marketplace like MoneyLion is the convenience. Not only does it save you hours of time researching and comparing options, but you can also receive your funds almost immediately. The sign-up process is quick and will give you results in under 30 seconds. Even if you are considering personal loans from traditional institutions, it’s worth checking out a loan marketplace to see what rates it is offering.
Peer-to-Peer vs. Marketplace Loans
Oftentimes the terms peer-to-peer (P2P) loans and marketplace loans will be used interchangeably. However, the two differ. Unlike marketplace loans that are pooled by both individual and institutional investors, P2P loans are just funded by individuals.
How to Make the Most of a Personal Loan Marketplace
Using a personal loan marketplace has many advantages. Get the most of a personal loan marketplace by following these tips:
Use multiple marketplaces: Using multiple marketplaces is a good idea before signing up for a loan. Because marketplaces are programmed to find you the best offers from their network of lenders, marketplaces like MoneyLion may give you different results. Given how quick and easy it is to get quotes on a marketplace, it's worth comparing offers across multiple marketplaces.
Apply multiple times: Because marketplaces are automated to give you results based on your application, answering differently each time will vary the results. If you are able to be flexible with some of your needs, like the time to maturity or amount of annual payments willing to be made, you may find yourself coming across more competitive loan options.
Best Uses for a Personal Loan
One of the reasons personal loans are so great is because they can ultimately be used for any purpose. However just because you can doesn’t always mean you should. Here are some of the best uses for a personal loan.
Debt consolidation: Paying off debt is one of the top reasons for taking out a personal loan and can be a great tool. Rather than making separate payments monthly, you can pay off your debt in full using a personal loan and then continue making payments on the loan while being free from other debt.
Emergency: Life can be unpredictable and sometimes you’ll find yourself in an emergency situation. Whether it is a leak in the roof or an ill family member, personal loans can be a great safety net to protect your health and safety.
Frequently Asked Questions
Which bank gives personal loans easily?
USAA is considered to be the easiest bank to get a personal loan from as they do not have a minimum credit score requirement.
What is the easiest loan to get approved for?
Generally, payday loans and other short-term loans are the easiest to get approved for.