CRITERIA TO APPLY FOR A LOAN
To be eligible when applying for a peer-to-peer loan you must:
- Have lived in the UK for a minimum of three years
- Over 20 years old
- In Employment with an income of £1,000 per month
- Work debit account for monthly repayments.
YOU WILL RECEIVE FAVOURABLE RATES IF YOU HAVE GOOD CREDIT
As part of the application process the company you are borriwng from will run a number of credit checks. The quality of your credit score will directly impact the rate of interest you will need to repay each month.
Customers with better credit are favoured by lenders becuase they have shown that they have a history of repaying loans in the past. Even more favourably looked upon is lenders who own a car or home, this demonstrates that you have proven that you can repay other loans in the past and will therefore be more likely to repay loans taken out through p2p lending.
You are considered low risk if you have a good credit score, and therefore will be offered a low rate of interest when you come to borrow. By comparison, a bad credit score will increase your interest rate. You my have a bad credit score if you have not made repayments on credit cards or loans in the past. This higher rate of interest will cover the cost of your loan if you default.
I CANNOT REPAY MY LOAN – WHAT DO I DO?
If you miss a repayment, or cannot pay, then your information will be sent to the credit reference agency. After the it has been reported to this agency, they will make a note on your credit file that you have not made, or defaulted, on your loan. This could directly impact your credit score and make it more difficult to borrow anything in the future.
On top of this, you may be charged late fees if you miss a repayment. If you do miss a repayment the lender will get in touch by phone or email to set up options for repayment. If you communicate openly with the lender they may offer flexibility on your arrangement, but fees might be charged if you ignore their communications.
