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P2P Lending and Credit Card Debt

by: Sean Michaels

Update: 09/2021


P2P Lending and Credit Card Debt

Technology has advanced by leaps and bounds over the past two decades. Every industry has been affected by the increased connection, speed of communication, and data processing abilities computers offer. One industry that has taken full advantage of the tools modern technology offers is the financial industry.

Banks and other financial institutions have developed new products and services that take advantage of everything the internet has to offer. From photo-depositing checks and getting your money in real-time, to stock brokerage firms that open stock market trading to everyone, almost every part of the financial industry has been revolutionized by the increased connectivity of the world.

One aspect of the financial industry that wouldn’t be possible without computers and the internet is the rise of P2P lending platforms. P2P, or peer-to-peer lending, works a bit differently than the traditional financial arrangements people have with banks and other lending institutions. We’ll look at P2P lending, and analyze how it can help consumers with credit cards and other bills.

What is P2P Lending?

P2P lending is a new model of financial arrangement made possible by the internet and wide-spread use of computers. In a traditional lending situation an individual applies for a loan from a bank or lender. The bank or lender then considers the application, analyzing it across multiple departments to determine if the bank will profit from the loan. These financial institutions were able to take advantage of the fact that there was no other way to get a loan other than by going through them. Moreover, institutional rules and regulations limited the kinds of loans a bank was willing to give, and who could qualify for those loans.

This model was flipped by P2P lending networks. These networks create a pool of investors who put up capital to be used in loans. The person offering capital can choose their own guidelines for the types of people and projects they want their capital to be put towards. As a result, more capital is available for loans now than ever before. Additionally, the rules and restrictions that governed banks don’t generally apply to P2P institutions. P2P lenders also generally have less overhead, as they only operate within the loans sector of the financial industry. This gives them a tremendous advantage compared to traditional lenders like banks, who have higher expenses and overhead, as well as more industries and products that they have to worry about.

As a result, individuals who might not qualify for bank loans can find excellent deals on loans on P2P lending networks.

Fast, Simple Lending

The biggest advantage that specializing in loans offers P2P lending networks is that they are able to quickly and efficiently give a decision on a loan. Moreover, because these sites don’t have the same overhead, regulatory hurdles, and expenses that traditional lending institutions have, they are able to offer loans to more people, and at lower interest rates. As a result, more people than ever are turning to P2P networks for loans to consolidate or refinance credit card debt.

Using a P2P Loan for Credit Card Debt

Credit cards have almost become a necessity in the modern economy. However, access to a credit card is a huge responsibility. Some consumers have found that they’ve overspent on their credit card. To make things worse, credit card companies charge some of the highest interest rates of any financial product on the market. As a result, more and more people are finding themselves buried in credit card debt that they can’t pay off.

One of the traditional ways to resolve too much credit card debt is to apply for a consolidation loan. These types of loans work by paying off your credit cards and then letting you make payments on the consolidation loan. This puts all of your debts into one easy-to-understand bill.

Additionally, consolidation loans offer a lower interest rate than you get from credit cards, which means you’ll save thousands or even tens of thousands of dollars over the course of paying off the loan. Moreover, the lower interest rates mean that you’ll be able to pay off your balance more quickly, as the interest won’t overwhelm your ability to lower your balance.

Interest rates

P2P lending networks excel at offering some of the lowest interest rates on the market. The lower overhead and increased flexibility these networks operate with means that they can still offer a good return on investment at lower rates.

This is important when you’re looking to pay off your credit card bills. One of the biggest barriers to paying bills quickly is high interest rates. Sometimes interest rates can be as high as 30% or more. Because P2P lending networks can offer lower rates and still turn a profit, you can use these products to consolidate your high-interest credit card bills into a low-interest consolidation loan.

Loan Term

Another advantage that P2P networks have when it comes to a loan to help with credit card bills is that they offer more flexible terms than traditional lending institutions. As a result, you can choose how fast you want to pay the loan back. This gives consumers the ability to repay their loans while sticking to a budget that works for them. Traditional lenders usually offer only one or two different repayment terms, so you’ll be forced to adjust your budget and lifestyle to work within those terms if you use a traditional institution to consolidate your credit card bills.


As you can see, P2P networks offer an innovative, fast, and low-cost solution to dealing with credit card bills. As a result, many consumers are turning to these lending networks to get loans that banks wouldn’t offer, with rates and terms that banks can’t match. If you’re looking for a way to resolve your credit card debt, consider taking out a consolidation loan with a P2P lending network. They have the speed, flexibility, and eligibility requirements that modern consumers are looking for from their financial products. Technology will continue to shape our future, but when it comes to lending, the future is already here.

Sean Michaels

Sean brings a decade worth of experience in credit repair to our company. Sean started his career working in an accounting department for a major credit card company. This was a natural fit, given his bachelor’s and master’s degrees in accounting.