How to Get a Loan When Big Banks Don’t Want You (or Vice Versa)

how to get a loan

Learn how to get a loan without supporting the questionable practices of big banks.

Thinking about buying a house or car? Want to start a small business or pay off credit card debt? Each of these goals requires cash, something that you might not have on hand. When many people think about how to get a loan for large purchases, they often assume big banks are their only option. In the past few years, getting loans from big banks has become harder, not to mention unattractive to those who don’t want to support banks’ dubious practices.

Many big banks are big time political lobbyists, using their deep pockets to support deregulation of their own industry. This had a big hand in causing the credit and housing market crisis that plunged the United States into recession in the first place. Beyond corruption, big banks also have a narrow view of the type of person who deserves a loan. Work for yourself or have less than perfect credit? It’s likely they’ll show you the door.

But not to worry. Just because big banks don’t want you (or vice versa) doesn’t mean you can’t learn how to get a loan another way. The emerging sharing economy has given rise to a number of peer-to-peer lending options for those who need a loan–from just a few dollars to thousands. If you’re wondering how to get a loan without supporting big banks, you’ll want to bookmark this list.

How To Get A Loan Using Peer-To-Peer Lending Sites

1. Familiarize yourself with the peer-to-peer lending industry. Like many others in the sharing economy, this industry connects people who have with people who need–the difference is instead of sharing a car or lawnmower, the asset is actually money. There are many reasons to feel hopeful about this new style of lending, but like all borrowing, it’s not without potential risk.

2. Determine the type and size loan that’s needed. Will it be a personal or professional loan? Will it be for $500 or $5,500? What kind of interest rate are you willing to pay? Experts say that micro loans, personal loans, credit card debt refinancing loans, small business loans, and loans for creative projects are best suited to peer-to-peer lending.

3. Know your credit score. If you’ve spent some time thinking about how to get a loan, you already know that your credit score is very important to getting approved. The difference between big banks and peer lenders is that a less-than-perfect credit score won’t automatically disqualify you, or lock you into a massive interest rate.

4. Choose your lender. Once you’ve learned more about how to get a loan using peer-to-peer lending, it’s time to choose a platform and a lender. Below are some of the most trusted and proven peer-to-peer lending platforms in the industry.

Lending Club – lends up to $33,000 towards consumer debt.

Prosper – provides loans ranging from $2,000 to $25,000, and for as little as $25 you can be a crowdfunder or investor.

Zopa – This London-based P2P lender offers up to £10,000, and individual borrowers deal directly with lenders.

SoMoLend – A Cincinnati-based crowdfunding platform specifically designed for small businesses.

Rebirth Financial – This New Orleans-based small business lending platform eliminates the additional costs of banks and other financial institutions.

People Capital – A revolutionary peer-to-peer lending platform designed specifically for students looking to finance college.

Peerform – Connecting personal borrowers together with investors who want to make loans at attractive interest rates.

Wikiloan – Leverages the power of your social networks to generate personal loans in a secure and professional manner.

For lots more information and resources about peer-to-peer lending, please check out my book about the sharing economy!

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Image: lendingmemo