‘A dating app for debt.’ For emergency cash, is an online peer-to-peer loan the right way to go? It depends.
Updated: 7 hours ago
Original article by:
Srivindhya Kolluru
TORONTO STAR
June 18, 2023
📰 Read the FULL ARTICLE here.
I spoke with the Toronto Star about peer-to-peer loans and whether they're a good option for emergency cash. Here are the highlights and my contributions.
Key Takeaways
Money is a major source of stress for Canadians, and many can't cover a surprise expense of a few hundred dollars.
Peer-to-peer (P2P) platforms connect borrowers with investors, often other individuals, who fund all or part of a loan.
P2P rates typically fall between high-interest credit cards or payday loans and cheaper options like a secured line of credit or HELOC.
P2P lending in Canada is regulated by the Canadian Securities Administrators, and only a couple of platforms were operating legally when the article was published.
There's more risk than with traditional lenders, so read the fine print on fees, interest rates and repayment terms.
My Perspective
P2P platforms match borrowers and investors based on criteria like the size of the loan and an interest rate suited to the borrower's credit history.
"It's kind of like a dating app for debt."
If you have a good credit score, you'll likely be approved faster and with less paperwork than at a traditional bank. Before you sign up, find out whether there are upfront fees, and ask whether you can change your payment arrangements after you get the loan.
"Is it actually as flexible as it's made to seem on your website, or will there be penalties?"
Originally published in the Toronto Star by Srivindhya Kolluru on June 18, 2023. Use the link at the top of this post to read the full article.
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