LendingZed provides loans between private individuals. This means lower interest rates for the borrower and better savings rates for the investor.
On the LendingZeds website, the needs of borrowers are matched with the investors’ savings capital.
The entire process, from the examination of loan applications and the establishment of agreements between borrowers and lenders, to the payment of loans is administered by LendingZed. It is completely free to apply for a loan and it works in the same smooth way as if you are applying for a loan from a regular bank.
What is different is that once your application has been approved, you have to wait for your loan to be matched with lenders. When it’s ready, you pay a brokerage fee for your loan.
When you apply for a loan, you are assigned a credit class and an interest level based on an assessment of your repayment ability. LendingZed uses five credit classes where credit class A represents the highest credit rating and E represents the lowest. The credit class determines what interest rate you will have to pay on the loan.
At LendingZed you can apply for a loan from 5000 SEK up to 300,000. The interest rate is from 2.95%. Credit class and maturity determine the interest rate
Requirements for applying for a loan from LendingZed
- Requirements for applying for a loan from LendingZed
- Who uses LendingZed?
- Benefits of LendingZed
- No payment remarks
- Income of at least SEK 180,000
Uncertain savings rates and difficulties in getting loans have made more and more people look for new options that they might not have thought of before. Peer to peer lending is attractive to both borrowers and lenders.
Brokerage services like LendingZed offer many simplifications to facilitate the lending process, including automatic payments and loan applications online.
Who uses LendingZed?
P2p lending has actually been used within families and between friends to borrow and lend money from each other at all times. Lending money may seem like a simple transaction, but problems can quickly arise.
By turning to an intermediary who helps to match borrowers and who helps to keep track of the payments, it is possible to borrow from each other with greater certainty and completely anonymously. LendingZed is a peer-to-peer page that ensures that the loan is properly documented. They take care of as much of the loan process as they can. This means, among other things, automatic payments so that the loan can be repaid without delay.
Benefits of LendingZed
One advantage of peer-to-peer loans is that they can be used for almost all financial needs. This type of loan can advantageously be used instead of a top loan or a traditional bank loan because application costs, interest rates and other fees are lower.
Another advantage is that these loans require much less paperwork than traditional bank loans. This relieves the burden on the borrower who does not have to fill in a large stack of forms and submit documents before the loan can be approved.
Lower interest rates are perhaps the most important reason why borrowers choose peer-to-peer loans instead of traditional financing. Better interest rates help both borrowers and lenders save money.
The lender’s advantage with peer-to-peer loans is that they get a higher return than on traditional savings accounts or other investment options. People who lend their money themselves do not need the intermediary (read the bank), which means that they can get a higher interest rate.
Even big-savers who traditionally bought bonds earn from visiting a p2p marketplace. They also get a more rewarding experience because they themselves can read about what the money should be used for and maybe go in with money in a project they think is particularly important.
Disadvantages of Peer-to-Peer loans
One of the disadvantages of peer-to-peer lending is that the lender can make a loss if the loan is not repaid. Often, lenders choose to take only a small part of a loan, so the losses can be limited to a minimum if the borrowed money is spread in several places.
If the borrower does not pay, LendingZed primarily takes care of the process of recovering the money through debt collection and the crown bailiff. Deposits of savings money on a p2p account are not covered by the bank guarantee as ordinary savings account so the investment is at risk if the borrower goes bankrupt.
The best way for lenders to protect themselves against losses and which is recommended by experienced p2p players is to lend a small amount of money to several borrowers instead of a large amount of money to an individual borrower.
Many people are much less likely to have problems with repayment at the same time. No investments are without risk, but many Swedish savers have already discovered that peer-to-peer lending is a working way to help people and make money at the same time. If you are unsure of how p2p works, you can visit LendingZed and read more about how their marketplace for loans directly between private persons works.