Peer-to-Peer Lending Provides Financial Alternative for Consumers Facing ... MarketWatch (press release)
SAN FRANCISCO, CA, Dec 20, 2011 (MARKETWIRE via COMTEX) -- This year, the average consumer will spend $704(1) on holiday related purchases. Prosper.com, a peer-to-peer lending marketplace for personal loans, advises shoppers to spend responsibly. When added to existing debts and the variable interest rates of credit cards, the extra expense of holiday shopping can become overwhelming. Debt consolidation loans represent 51% of all loans on Prosper, and have shown consistent growth over the past 5 months.
Peer-to-peer (P2P) lending can replace high credit card interest rates and constantly changing monthly payments with lower rates and fixed, predictable payment terms. Data shows that even as consumers were preparing to spend money on gifts for this year, more than 14.1 million of them were still paying off holiday-related spending from last year, up from 13.6 million in 2009(2).
"Unfortunately, millions of Americans will likely incur thousands of dollars in high-interest credit card debt as a result of over-spending this holiday season," said Chris Larsen, CEO and founder of Prosper.com. "Instead of continuing the cycle of expensive, variable, revolving credit, a P2P loan can be a much more affordable way for consumers to lower their costs, improve their personal balance sheet and eliminate debt."
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Is it better to us a Consoladation company or to use a home equity loan to pay off debt?
I am in a little over $45,000 credit card debt. I am trying to figure out if it would be better for me to use a consolidation company or to get a home equity loan.
A home equity loan is the way to go. Get low interest, make sure it is FIXED interests then borrow against your home and pray you can pay the $45,000 wackeroo off .
Home equity rates are much lower than some consolidation loans and it can be used for tax deductions most of the time. Get one & pay off your credit card debt then you will only have one payment at a much more affordable rate.
You have the option to lock in the rate to a fixed rate.
I would advise talking to the CCC.
In either case, read everything carefully before you sign it.
Grandpa
1. Equity in your Home
2. Rate on Equity
3. If the Loan is Tax Deductible -
4. If you can afford the payment
If you have More than 10% Equity in your Home, Good Credit and you used the 45K on Home Improvement and you can afford the payment consolidate with a Home Equity Loan.
The IRS requires you to use debt for home improvement for it to be tax deductible.
Best way to get out of debt?
I have heard that places like incharge debt solution isnt the best way to get out of debt because it actually hurts your credit saying that you cant handle your own debt and when you go to an outside company to do it for you it makes it worse... Or is that even true? What about debt consoladation? when you get a loan that pays off all your debt and you pay them.. i have about 5000 in debt with interest i cant afford to do it the way i am doing it any hel[ful sugesstions?
Budget. You will have to make a lifestyle change or all the gimmicks and programs won't work. If your lifestyle doesn't decrease to meet you income you will just accumulate debt again. Make a budget and tell every dollar you make where to go. You can cut back here and there (eating out, junk, etc) and find the money to start paying the debt down. there is no easy solution to getting it done right. You can look around and ebay soem things or have a garage sale for a quick cash injection.
Check out www.daveramsey.com The total money makeover works and even though it is tough it is worth it.
You've made the right decision to want out of debt. To stay out you have to decide to never go back and that will require a change in strategy with your money. Best of luck.
