The presence of new lending options has made loan acquisitions easier and faster these days. Compared with traditional options, such as taking out loans from banks and credit unions, new lending options like bad credit cash loans, or popularly known as payday advances, and peer-to-peer lending both entail more lenient processes with fewer requirements. As such, many borrowers have started to use these new alternatives, making both options more and more popular each day. But which one of these two is the better option? Below are the basic characteristics.
What Is Peer-to-Peer Lending?
Peer-to-peer lending is a lending option that lets you borrow cash not from banks and financial institutions, nor from credit unions, but from strangers or from individuals who have an account from a website that offers this lending method. With this option, lenders will decide who they want to lend money to and at what rate. Meanwhile, to access cash loans from these lenders, you just need to provide your personal information, how much you are planning to borrow, as well as the interest rate you are willing to pay.
If you’re worried about your safety when acquiring cash loans through peer-to-peer lending, then you don’t have to as there are a good websites that have credit license from national and local authorities like the Office of Fair Trading.
What Are Online Cash Loans?
Online cash loans are also known in other terms, like payday advances. They are primarily designed for consumers who have poor credit. But unlike peer-to-peer lending, payday advances are your better option if you are in need of fast cash. Lending companies can provide the funds you need within an hour or day through your bank account. It’s because the processes and evaluation of online loan applications are not so rigid and strict compared with banks. One prominent characteristic of payday advances is that lenders do no credit check. So if you are having difficulties acquiring loans through traditional methods, payday cash loans are definitely a good option.
To protect you from payday loans, local and national authorities have also policies to regulate these loans, which include ensuring the privacy and confidentiality of information you provide to lenders. Also, to protect consumers from lending companies, authorities are also starting to provide a cap on payday loans. Payday loans are known to have higher interest rates than other lending options, and providing a cap means protecting credit consumers from lending companies that seem to take advantage of vulnerable borrowers.