AKA Lending Club. I mentioned before that we were considering this option. Well, we decided to go for it.
Don't know what this is? Basically, it is applying for an on-line loan, but instead of the funding coming from a bank or financial institution, it comes from multiple "investors." Members can choose which loans they would like to financial assist, at whatever amount they choose. The investors in turn make just under 10% interest. The investee.....you get a basic loan. They offer 36 or 60 month terms, and interest rates vary by your credit score.
Where we stand. We qualified for A5 tier. Basically, the bottom rung of the best group. Hey, at least were in the A group. Ulitmately, we asked for $13,600 at 7.88% over 36 months. It comes out to $425 a month.
Why this is better for us. This loan, if fully funded, will pay off CC1, which is at 19.24%!!! The remainder will go to CC3, at 14.24%. The minimum payments for these are at over $500, so even though CC3 won't be gone, the amount will go down roughly 50%. We still come out ahead, or at least even, but these will be GONE. And the new loan will be GONE in 36 month. Flat.
The Process. Actually, it is very straightforward. Fill out application, which is nothing more than name, address, etc, and employment, and of course, what you are looking for. It quickly tells you what you qualify for, along with some other options. In our case, we actually started asking for a higher amount, but that was also at a higher interest rate. The system offered us some other choices, and we ultimately decided what would be best for us.
The loan went live the next day, and as of this morning....we have $2100 dollars and 43 investors. We received one question that we have answered.
As for verification, we had to do a phone verification, to make sure we are who we say we are, and this morning will be faxing paystubs.
Now we just wait. The loan stays live for 2 weeks. At the end of the period, if the loan is funded at least 60%, we will automatically get that money. If it isn't, we have the option to decline, relist, or take what we got. We are hoping within 2 weeks we will be fully funded. Since it is only 24 hrs in, so far so good!
Wish us luck!
ETA: As of 1:00pm, we were up to $2,625 and 54 investors. I know that some people have been offering $25, since I am checking this regularly. If it goes up by 1 investor, and $25....there ya go. I am just thrilled that anyone believes in us enough to contribute. We still need another $5,535 to hit our 60% funding cash out point, but all the "snowflakes" (ala Dave Ramsey style!) are helping!