How difficult is it to get a personal loan nowadays?
To qualify for a loan through your bank, it is becoming quite difficult because these aren’t back by assets. For smaller amounts, between $3K and $5K (“signature loans”), they can be issued to good customers with solid credit scores pretty easily but they typically carry high interest rates.
Getting a larger personal loan is very difficult and time-consuming. First, you have to fill out a long loan application, and many times you need to assign collateral. As the size of the loan increases, you need a credit score above 700 to be considered, which according to Money-Zine, 58% do have.
So what can the remaining 42% do?
Many turn to friends/family or credit cards. Credit cards can provide short-term relief but many times due to their extremely high interest rates and late payment penalties once you fall behind you stay behind.
One of the trending solutions to this problem is P2P Lending. You have to fill an application and have a credit inquiry, but supplemental documents such as a business plan or additional background information on what you plan to do with the funds can help secure the loan. Its a less rigid structure compared to banks and helps the right people get the right loan