Financial guru Suze Orman, no fan of banks, has shared her wisdom on the benefits of using a peer to peer lending platform from the perspective of a borrower. She tells the camera, “is it a smart move for you…?”.
Orman correctly describes P2P lending as cutting traditional lenders out of the process connecting those who need money with those who have. Removing the old school lenders from the process means “lower interest rates for borrowers and higher returns for investors”. Orman is differentiates between the good and the bad for borrowers by saying:
For borrowers:
- Monthly payment could be higher since capped at 5 years [versus longer]
- Fee of 1% to 5%, IE on A $10,000 you may pay up to $500.
- And don’t be late or your Fico score may feel the pain
For investors:
- 1% loan fee
- Collection fee assessed if borrower is late
- If borrower defaults, you lose out
Orman prefers for borrowers who are consolidating credit card debt, they should choose debt management companies who may be able to drop the rate down to 0%.
Video embedded below.
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