Companies which operate peer to peer lending services, such as Lending Club, have seen significant growth in 2010 and into 2011. Consumers are using these services because they can get better interest rate for personal loans than they would by borrowing from a local bank and investors are using lending club to get a great rate of return on their money. Using a peer-to-peer lending website is still a new experience for most borrowers, but doing so might allow you get a loan with much better terms and rates than you would from a local bank.
Is the experience of getting a personal loan better than that of going through a real bank? Here’s the story of Matt Jabs from Debt Free Adventure about his experience getting a loan from Lending Club. After three of his credit cards raised their interest rates because of “the bad economy”, so Jabs looked into using Lending Club to consolidate his high interest credit card debt into a lower fixed-term loan.
Jabs considered the interest rates, origination fees and found that e would save himself over $500 by the time he had paid off his loans. Jabs’ story covers he details of this process, including how he saved 10% on one card. You can read Jabs’ full story here.
Currently borrowers with great credit can get personal loans at an interest rate of 6.78%. Borrowers with lower credit ratings will typically pay interest rates between 8% and 15%, much lower than what you would be charged with a high-interest credit card.
If you’re interested in borrowing on a personal loan through Lending Club, visit their website.
