Almost all the financial experts and the borrower agree that the peer-to-peer loan poses the least risk to the debtor. With peer-to-peer lending, you know the exact terms of the loan, and if approved, you receive the money immediately and can spend it however you like.
The risk really lies on the lender who may not get his loan back. With hundreds of thousands of investors borrowing at these sites, it is safe to assume that the default rate is surprisingly low, which means the borrower is pleased with the terms of the loan and can afford to pay their loans.
Despite having a limited risk, you still have to do your due diligence by comparing the loan sites, as each site has a different term, qualification requirements, and interest rates. Also, you need to invest in – Who should invest in it?
While peer-to-peer lenders have less stringent lending requirements from banks and other lending institutions, they are still selective about whom they choose to give money to. It helps to have a good credit score of 700 or above and the ratio of income-to-debt is solid.
The key to using loans peer-to-peer to finally get rid of your debt load is to avoid using your credit card and racking up the balance again. It's wise to keep the card for emergencies, but avoid reckless use it to make purchases. If you avoid using your credit card again and regularly perform loan payments peer-to-peer, your debt burden can eventually be appointed in a short time.