There are essentially two types of Centrelink loans available and multiple options within these two…
Peer-to-peer lending is a unique way to borrow money that provides an alternative to traditional bank lending options. In this lending marketplace, those looking to borrow money are matched with potential private investors. These investors loan the person money and then receives regular payments that include interest.
SocietyOne is the first fully compliant lender that offers peer-to-peer lending options. Since its inception in 2012, it has issued thousands of loans that total more than $1.2 million.
How Does Peer-to-Peer Lending Work?
In order to be eligible for a peer-to-peer loan, you must be over 21-years of age, be employed on a full-time basis, and have a good credit history. If you are interested in peer-to-peer lending and think you are eligible, the first step is to complete an application form. You will have to provide proof of income, provide details about yourself, and state the purpose for your loan. There are many types of peer-to-peer loans available, such as Holiday Loans, Home Improvement Loans, Business Loans, Student Loans, Debt Consolidation Loans, Wedding Loans, and Vehicle Loans.
Once your application is approved, the financial intermediary company you are working with will post your information for potential investors to view. Investors will not be able to see your personal information, such as your name, address, or phone number, but will have access to your credit report and salary information. Lenders will compete with each other to offer you the best loan deal, including interest rates, possible. Once you select a lender and both parties agree to all of the conditions, the loan is finalized.
Pros of Peer-to-Peer Lending
There are several great benefits you can receive from obtaining a peer-to-peer loan. Here is a look at a few of these benefits.
• Typically, these loans offer lower interest rates then you will find when using other financial institutions.
• Lenders will compete for your loan, providing the best interest rates possible.
• You are able to set, or negotiate, the condition for your own loan, rather than being required to follow a set of conditions and regulations.
• Since this type of lending is not regulated by the government as much, it means that there is less paperwork required. This results in quicker turnaround and gives you access to your money sooner.
Cons of Peer-to-Peer Lending
As with any type of lending option, there are also several disadvantages that must be considered when using this type of lending. Here is a look at some of the most common cons of peer-to-peer lending.
• You must have a good credit history to even be considered for this type of loan.
• Your loan is considered to be a security, which means that it can be sold at any time to another lender without your approval.
• Some lenders put extra condition in with their bid for you loan. If you do not read the entire bid thoroughly, you will be responsible for compiling with these extra conditions.
• There is a chance that you will not be able to find a lender willing to meet your condition or invest in your loan.
How to Apply for Lending
To apply for peer-to-peer lending, you must first contact one of the several lending intermediaries in Australia. SocietyOne is the largest such intermediary and was the first company to become fully complaint. The Lending Hub is an additional intermediary found in Australia. When you apply, you will be asked to complete a standard loan application that provides income information, along with your assets and expenses. You will also need to fill out a form that provides more personal information, the purpose for the loan, and your set of terms and conditions.
This can be a great way to obtain a low-interest loan, but is only for people who have a good credit history. Be sure to read through each potential bid and make sure you are in agreement with all the conditions that the lender may have included in the bid. As long as you are careful and take your time in selecting the right lender, this can be a good method for obtaining a loan that allows you to eliminate the need for a bank loan.
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