Are Peer to Peer Loans for Blacklisted a Good Choice?
Posted by financial advisor on
The concept of peer to peer (P2P) lending is readily applied in South Africa, but many borrowers are not well familiar with it. Such lending platforms provide loans for blacklisted and this has given a boost to their popularity. Find out more about them and consider their benefits and drawbacks.
In peer to peer lending, the loans for blacklisted are granted from one individual to another. There are no banks or other lending institutions involved.
There is just an intermediary that charges a small fee.
There are three ways in which the interest rate on P2P loans can be determined. With reverse auctioning, the lenders compete among each other for each borrower and strive to offer the lowest rate. With traditional auctioning, the borrowers strive to secure the loan by offering to pay higher interest. The interest may be set by the lending platform. In such cases, it can be reduced or increased in line with the credibility of each borrower.
The main benefits of peer to peer lending for blacklisted individuals is that it gives them much higher chances of approval especially in comparison to traditional lenders like Standard Bank, Capitec Bank or Imperial Bank. Additionally, there is always the chance of securing a lower interest rate especially in the case of reverse auctioning. Generally, there are many P2P lenders so comparison shopping should produce highly satisfactory results.
The main drawback of P2P lending is that it is not as secure as the traditional lending and banking services. You may come across various issues when dealing with an individual lender. You have to be extra careful.
You can now decide whether the P2P loans for blacklisted are right for you.