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Loan Type

nomadic_traveler
Regular Contributor

Loan Type

When applying for loans through Prosper, Lending Club and the others they always ask what the loan is for and then they list some generic choices.  

I was curious if anyone has any insight into if it matters what you choose?

I did find a post talking about if you choose credit card or debt consoladation your chances might not be as good as some other choices.  This post was specific as to why asking for a loan for consoladation was actually not a good idea.

In the grand scheme of things if you are looking for a loan to help out ones credit score then really it doesn't matter what it is for.  So I'm curious what the best option is to choose?

Message 1 of 4
3 REPLIES 3
mycreditscoreisfair
Frequent Contributor

Re: Loan Type

When I applied for a personal loan for debt consolidation, I listed it as such. The lender inquired about what debts would be paid off with the loan. I thought this was important so the lender knows what my monthly debts would be.

 

If you pick something like 'home improvements' or 'major purchase' then you're going to be adding a new debt, whereas when you consolidate debts, you're likely lowering your monthly bills.

 

But of course, I'd pick whatever is closest to your reason for obtaining the loan.

Starting score (January 2020): 454
First goal (December 2020): 580
Current score: 665
Current goal: 670

Declined credit cards: First Premier Bank, Verve, Self, Credit One, Today Smiley Happy
Message 2 of 4
203bravo
Established Contributor

Re: Loan Type

Remember also that these platforms are peer to peer lending.... meaning that one they approve your loan and give you an interest rate they they farm this loan out to their investor membes. Those membes will see your current fico cedit score, a grade assisnged by the plafrom, as well as the statement you make as for the reason for the loan.  Some membes may not help to finance a specific loan if it is intended to be use for some specific reasons. And of couse if enough of the investor membes ae not willing to invest in a speific loan then it wil not fund and the borrowe will not get the loan - even thogh they have been told they ae approved. 

 

To be honest - I am an investor member of one of these plaffoms and while I do have my standards on which of these loans requets that I will invest in and those that I pass on Debt consolition is ususal an easy one to get funded and usually quick.

Best ofluck to you. 

Message 3 of 4
nomadic_traveler
Regular Contributor

Re: Loan Type


@203bravo wrote:

Remember also that these platforms are peer to peer lending.... meaning that one they approve your loan and give you an interest rate they they farm this loan out to their investor membes. Those membes will see your current fico cedit score, a grade assisnged by the plafrom, as well as the statement you make as for the reason for the loan.  Some membes may not help to finance a specific loan if it is intended to be use for some specific reasons. And of couse if enough of the investor membes ae not willing to invest in a speific loan then it wil not fund and the borrowe will not get the loan - even thogh they have been told they ae approved. 

 

To be honest - I am an investor member of one of these plaffoms and while I do have my standards on which of these loans requets that I will invest in and those that I pass on Debt consolition is ususal an easy one to get funded and usually quick.

Best ofluck to you. 


Thank you for that.  It's good to hear from someone on the other side of the process.  

Message 4 of 4
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