Debt consolidation more likely with peer-to-peer lending

Consumers that are interested in debt consolidation may find that banks are imposing stricter lending policies in light of the country’s current economic state.

But one way for them to pursue debt consolidation is by seeking out peer-to-peer loans. According to a report from CBS News, such borrowing is becoming more popular as banks make it harder to get loans, and has increased 800 percent since last year. Peer-to-peer lending lets strangers take out loans from one another through websites, and there are a number of benefits. In addition, approval rates are higher than those typically offered by banks, and there is no penalty fee for paying off the loan before the agreed-upon date.

The report said that while there are fees involved, they are typically less than those a consumer pursuing debt consolidation would find from credit card companies for balance transfers.

A report from the consumer advice website Helium said that consumers can even save money by seeking out peer-to-peer loans because the interest rates they offer are lower than those offered by banks.