Consolidating debt bad idea
Another notable difference between P2P loans and those issued by banks are that they come with a fixed term for payment, meaning the borrower typically has a deadline of three to five years to pay the loan off entirely, with monthly payments to meet.
"Some people like the idea of having a fixed term for the payment," said Peter Renton, founder of Lend Academy. They know they have three or five years on a loan and they will have paid off their debt." (See also: Should You Use Peer-to-Peer Lending to Pay Down Credit Card Debt?
The annual percentage rate (APR) for a loan typically incorporates points and finance charges, whereas the APR for a line of credit typically reflects only the interest rate.
(See our favorite credit cards for 0% balance transfers) In peer-to-peer lending, borrowers obtain a loan from individual lenders without going through a traditional financial institution.There's typically a fee in the range of 3% of your debt that you'll pay upon shifting your balance onto the new card.And be mindful that that introductory 0% interest rate won't last forever.) If you own a home, you may be able to use your home equity to consolidate your debt.The risk, of course, is that if you don't use that equity responsibly, you could find yourself facing foreclosure.
Money can definitely be a tricky thing to deal with sometimes.