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A bank will usually have traditional borrowing vehicles like secured loans of mortgages, car, and business loans. However, if you are looking for more unconventional forms of borrowing, you should go online to discover all your options. The Internet has become a great resource for people who can’t qualify for conventional loans. You can find information on payday loans, peer-to-peer lending sites, or circle lending options.

Payday Loans

The payday loan persists as a good vehicle for short-term borrowing for people with bad or no credit standing. The online payday lenders offer a bit more convenience and discreteness than brick-and-mortar payday lending sites. As long as you are employed, you might qualify for a short-term loan from $300 to $600. You don’t have to leave the comfort of your home and no one needs to see you walking in or out of a lender’s office. The original fee for lending is waived in some cases for new borrowers. The loan is due to be paid back, usually, on your next paycheck cycle.

If you have a short-term shortfall in cash, a payday loan can be a great way to float your money. However, many lenders do limit the number of payday loans you can withdraw and the amount too. If you need more than what a payday loan can offer you, you can try circle lending or peer-to-peer lending. Some of these offer you the ability to get loans only if you have decent credit, however, and in that respect it differs from a payday loan. Payday lenders won’t check your credit score, unlike peer-to-peer lenders. Circle lenders don’t check either, but require that you already know who might lend you money. You will have to review your situation and decide which is best for you.

Peer-To-Peer Lending

There are a few peer-to-peer lending sites sprouting up for people who want to get either a lower interest rate on a loan or have difficulty securing it through conventional means. They work by offering regular people the chance to bid on your loan request and offer smaller sums of money until your total amount is secured, distributed across multiple people. This lowers the lenders risks while giving the borrower a way to borrow outside the normal banking institutions. This can sometimes mean the difference between getting a loan or not. People who have a high balance on their credit cards may sometimes be able to get a lower one by using these online resources.

The peer-to-peer lending sites have their own rules. Most do check your credit score at the credit bureaus, but whether you are allowed to apply for a loan or not is dependent on the particular rules for the site. You may not be able to join lendingclub.com if you don’t have at least a credit score of 640. Even making that grade, they will look at your debt-to-income ratios and any past delinquencies.

Prosper.com is another site that offers peer-to-peer lending. You can expect to also be graded for your creditworthiness. The rules may differ, however. You do have the option to be vouched for by other members on the site, but that doesn’t necessarily mean you will get your loan. Repayment terms can be up to three years and the interest rates are fixed for the life of the loan. Defaults do get reported to credit bureaus and there are attempts at collections on some sites.

Peer-to-peer lending sites don’t offer the lowest interest rates for people with good credit. You can probably get a better deal from conventional bankers, if your FICO score is high. These sites are mostly for people who have somewhat good scores but not enough to secure the funding they need through conventional means. You will see people trying to secure loans for businesses, home improvement, or to pay off high interest credit card rates. Since credit card rates can range up to 30% in some cases, or more, an 18% rate on the same balance may look like a deal. In general, however, any double-digit rate on credit card debt is not a good deal.

Circle Lending

Circle lending is like peer-to-peer lending with one major difference: it is limited to a circle of people you choose to include. Mostly, circle lending sites were used for family loans where people did not want to just have a verbal contract, but needed some sort of written contract too. If you’ve ever lent money to someone in your family, you know how sticky a situation it is to get your money back without breaking the relationship. Even if you don’t want the money back, the relationship may falter because the borrower feels guilty not repaying the loan. So, circle lending steps in as an intermediary to help families and closed circles to manage the loan.

Circle lending is now at virginmoneyus.com. You can include anybody in your circle from family, relatives, acquaintances, or even strangers (if you can get them to agree to loan you money). The site sets up a repayment plan and handles the documentation. They offer services to send out email notices and do electronic funds transfers for monthly payments. The price for the services is based on the package you choose, but it is usually a standard fee. For example, the HandShakePlus package costs $199 to process and then a small monthly fee, approximately $9 or more.

This type of site is good for people with very bad credit who don’t qualify to be a member of a peer-to-peer lending site and want more than $600 (the maximum for the payday loans). You can also have great credit and just want to take advantage of a loan that is non-conventional and costs you less. For the most part, though, people don’t like to involve their family and relatives in their borrowing habits for fear it will break the relationship. With circle lending you have some very clear guidelines and it won’t be your Aunt pestering you for repayment, it will be the site intermediary.

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