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Alternatives for borrowing during the credit crunch
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| Stressed woman (c) Rex Pictures |
3. Peer-to-peer pressure
Peer-to-peer lending (P2P) or “social finance” combines online auction, social networking and elite finance to match lenders and borrowers.
Zopa is one online marketplace that helps parties enter into an social borrowing agreements. Personal loans and car loans are the most popular uses for borrowed money, with interest rates set by the lender.
The typical rate is 11.4% on a £5,000 loan over 3 years, according to the website.
As you would expect with any loan you must confirm your identity, have a good a track record of repaying debt and an income large enough to support their borrowings. Zopa will also look into your ability to repay the loan.
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4. Ask the family
One in seven first-time buyers is given money by parents, according to Abbey. But it’s not only those stepping on to the property ladder who can borrow from the Bank of Mum and Dad.
Britons currently owe more than £251bn to family members – an increase of 82% on the £14bn they were owed 10 years ago, according to Skipton Building Society.
But generosity to our nearest and dearest is certainly causing resentment to fester, says Jennifer Holloway, head of media relations at Skipton Building Society. One in 10 said they felt their family took them for granted, with 9% admitting they were reluctant lenders in the first place and were pressured into the loan.
5. Ask around
It’s not only your own bank manager, or the bank holding your savings or current account that can give you a personal loan.
Other lenders, perhaps offering more flexible lending criteria, may be willing to help.
