Am I any more likely to get a P2P loan than a bank loan?

weebit

Hi all,

Quick question, I know any loans are obviously dependant on individual circumstances, so there may not actually be an answer to this question, but I'm looking at getting a loan in order to consolidate my debts. I've calculated everything out and i know that between me and my wife, we can afford to take out a loan and meet all the monthly payments.

I was looking at the Peer to Peer loans (Zopa etc.) and wondered if i'm any more likely to get a loan through them than i am from a regular bank? I'm enticed by the low APRs (4.5%) which will cut the interest on my credit cards a lot.

The intention would be to pay off about 3 or 4 credit cards and then close them all.

Any thoughts?

nidO

Probably not.
P2P lenders, the big names at least (Zopa & Ratesetter) cater to the lowest risk end of the market and are intended to be a cheaper alternative to banks rather than an easier-to-get alternative, their lending criteria are probably just as strict, if not more so, than most banks.

Apples2

You are correct in suggesting there is no simple answer although it is generally accepted P2P loans are more difficult to obtain at the headline rate.

Consider the simple fact that they will add up all your outstanding debts and add that to the loan you are requesting. the end figure is what they will base their risk upon.
Once again a general accepted figure is you should not go above 50% of your income when it is all added up.

Also bear in mind they look at your credit limits, not the balance, when totting up.

Wilkins

weebit wrote: »

The intention would be to pay off about 3 or 4 credit cards and then close them all.

Any thoughts?

It seems to be the case that most, if not all, lenders have no interest whatsoever in the borrower's intentions. All their computers will see is your current indebtedness. So, be prepared for "computer says no" and a higher APR than you would like.

DCFC79

weebit wrote: »

Hi all,

Quick question, I know any loans are obviously dependant on individual circumstances, so there may not actually be an answer to this question, but I'm looking at getting a loan in order to consolidate my debts. I've calculated everything out and i know that between me and my wife, we can afford to take out a loan and meet all the monthly payments.

I was looking at the Peer to Peer loans (Zopa etc.) and wondered if i'm any more likely to get a loan through them than i am from a regular bank? I'm enticed by the low APRs (4.5%) which will cut the interest on my credit cards a lot.

The intention would be to pay off about 3 or 4 credit cards and then close them all.

Any thoughts?

Your intentions may be all well and good but the bank wont see it like that, all they will see is you have x amount on various credit cards and you want a loan to add to your extra debt.

As far as the bank/lender go you could go and have a splurge (not saying you will) with the loan and be in twice as much trouble.

How much do you have on your cards ?

27col

As a Zopa lender I am sure that I speak for many others when I say that, as it is our money that Zopa is lending out, the stricter their criteria are, the better. We are just small investors and can ill afford to lend money to possible defaulters. Having said that, I believe that the Zopa default percentages are very low. Long may it stay that way.

DesG

I was just approved for a Zopa loan, and even I didn't get the advertised rate!

It ended up at 4.68 APR which was close enough to the Sainsbury rate of 4.6 that I went ahead, as I would rather give the interest to savers like the above poster than the banks, or worse, supermarkets pretending to be banks, lol.

Application process was straightforward if you have any questions, ask away.

Cheers, Des.

edward123

DesG wrote: »

I was just approved for a Zopa loan, and even I didn't get the advertised rate!

It ended up at 4.68 APR which was close enough to the Sainsbury rate of 4.6 that I went ahead, as I would rather give the interest to savers like the above poster than the banks, or worse, supermarkets pretending to be banks, lol.

Application process was straightforward if you have any questions, ask away.

Cheers, Des.

Agreed. :j

27col

As lenders we do not get the full interest that the borrowers pay, as we have to give Zopa 1%. Also the interest we get is not taxed at source. So we have to pay that as well. However, it is true to say that we do a lot better than we would if the money was in the bank.

Help_I_Have_No_Money

I used Zopa, great service but they do credit check you as well. Dont think one is more likely than the other. DONT GO TO 'LEGAL LOAN SHARKS' LIKE WONGA!

That will only end one way. In tears!