In the UK, just like the US, consumers pay a ridiculous amount per year financing their credit cards. The estimated total may top £6 billion per year, an astounding amount but understandable when one grasps the high rate of interest consumers pay today. Now with a growing number of peer to peer lending platforms seeking to capitalize on this market inefficiency, consumers finally have some relief at hand. Madiston LendLoanInvest, one of these young P2P platforms, is targeting credit card debt and has built a debt consolidation process which gives lenders accurate information about the proposed loan but claims not to disadvantage borrowers in the calculation.
Based on an average credit card interest rate of 17.1 per cent and the “typical” UK consumer holding up to five cards each, a UK borrower may receive a consolidation loan at around 8%, then as much as £3.22 billion could be wiped off their credit card bills, leaving a drastically reduced debt cost of £2.82 billion per annum.
“It’s a shocking amount that is spent needlessly on expensive credit card interest. But what’s really frustrating is that there is a better way that doesn’t involve large financial institutions, that many people don’t even know about. Ordinary people, like you or me, help by lending small amounts at sensible interest rates to creditworthy borrowers, replacing their expensive debt with a sensibly-priced P2P loan. Its a win:win – lenders benefit, borrowers benefit and the money goes back into the economy, so it helps the UK’s recovery too.”