There are lots of millionaires who lend money to others, thanks to an evolving method of borrowing to people they don’t know. Some are celebrities, working under a different name and some using their own name, are taking part in it. This isn’t charity; it’s a money maker for them. They are taking part in peer to peer lending, for the most part, and it is becoming a great investment for many of them. The people borrowing the funds might be using it to start up a new business, pay off medical bills, or keep a home out of foreclosure. Best of all, even those with really bad credit might be able to qualify, depending what each lender sets up as their own personal criteria.
Millionaires Lending Money to Others – Peer to Peer
Peer to peer lending has been around for several years now. Once upon a time, it was just a very small group of relatively rich and wealthy people that would borrow their money to people who couldn’t qualify for a loan or who didn’t want to go through a traditional bank to do it. Today, it has grown into a real ‘banking’ industry, which has shown benefits to both borrowers and lenders alike.
Who Qualifies for Personal Loans from the Rich?
As with virtually all loan programs, some people will not qualify, but most will have a shot at getting approved from various people that are on the p2p lending sites.
Each lender decides their own criteria and chooses who they will and will not approve. Just like a bank, most look at a few specific things when they try to determine who is going to get instant personal loan approval, even if they cater to bad credit applicants.
Credit Score: This should come as no surprise to anyone. If a lender advertises something like guaranteed approval, no credit check personal loans, they are probably not being honest. Would you loan someone money you never met before, without first checking into their background and ability to pay you back? I wouldn’t and neither would most millionaires, even if they charged really high interest rates. Expect to submit to a credit check before you are approved for any personal loans, no matter how much they claim to cater to those with really bad credit and low fico scores.
Loan to Value Ratio: If you are borrowing money to buy any item, expect the loan to value ratio to be assessed. For the most part, you will not be able to get more than 80% of the value of any item you try to borrow money for, which is consistent with most banks. Some might offer 100% financing, but this will not be the normal process. If you find one of the lenders like that and get approved, if it’s what you need, you should go for it and sign the contract.
Debt to Income Ratio: What are your monthly debt payment obligations compared to your income? Millionaires who lend money to the poor and to ordinary people look at this carefully. It is one of the more telling signs about whether or not a borrower can realistically pay back a loan they take out.
Are Interest Rates Competitive?
Yes, but it will vary greatly as you search around and the rates will be determined by your credit score, along with the other criteria set forth above. Since each lender sets their own criteria for approval, the rates will vary quite a bit. Those catering to low credit scores or fast approval applicants will generally charge a higher rate, which should be fully expected and understood.
Alternatives to Peer to Peer Lending from Millionaires
Of course, when it comes to borrowing money from the rich, you have multiple additional alternatives you might want to consider. Listed below are a few of the ones that could be of interest to you.
Online Money Lenders: Just use caution with any institution that promises guaranteed approval without credit check or same day service without payment history checks. It isn’t realistic to expect to find people borrowing money like that in today’s world.
Traditional Banks: If you have a good relationship and payment history with a local bank, you might be best off just dealing with them for your personal loan. Rates are generally decent and you can generally meet with a real person and not just do all the transactions online, which is quite impersonal.
Prosper and Others: There are some sites which allow you to post your personal info and have banks and borrowers compete for your business, in auction style form. Sites like prosper allow you to post what you want to borrow and allow lenders to bid on the rate of interest they will extend to you. It’s sort of like an auction and you end up being the winner. Of course, those with good credit scores, generally over 680, will get the better rates. Those over 720 will do even better yet. Anyone under 640, however, will not get the best rates possible. People under 600 will have a hard time getting approved in general, even at higher rates of interest. It’s still a good way to see what is out there as you look into getting a quick personal loan, even if your score isn't up to standards set forth by the banking industry.
Famous People Lending Money to Others
You will be hard pressed to find any famous people openly claiming and advertising about lending money to others. One semi famous person, Troy McClain, member of the first season of The Apprentice with Donald Trump, stated doing such on air, during one of the episodes. Beyond him, few will ever openly admit to something like this. This is because it’s opening the gages to scam artists. Those other famous celebrities making an investment like this do so anonymously, for the most part.
You will, on occasion, read of celebrities that offer low interest loans for charitable purposes, generally housing for the poor, but this is often done to both earn money and to gain a possible tax write off. Millionaires who lend money to others are out there, but they might be doing it anonymously.