Loanvia, is a website that people can go to when they need a payday loan, but they are not an ordinary payday loan company. In fact, they are not even a lending company at all. They do not loan any money to anyone. Instead, lenders on their site will invest their money to borrowers for a profitable return. Loanvia, has revolutionized the whole payday advance concept by classifying itself as a payday social lending website.
Those who are familiar with the peer to peer lending concept will easily understand how Loanvia works. It is very familiar to Prosper, the Lending Club and other P2P sites. The major difference is that a borrower will not be looking to borrow a very large amount of money. Unlike regular P2P sites, borrowers on Loanvia are just looking for a payday loan. They are not attempting to borrow thousands of dollars for a business start up, new car, medical bills or anything like that. These are people who would normally be trying to get a cash advance from a payday loan company. They usually just need a coupe of hundred dollars to hold them over until their next pay date.
Those who are not familiar with peer to peer lending sites may be a bit confused here, but I will explain how they work in the simplest and shortest form possible. On a peer to peer website, there are many borrowers and lenders. The borrowers are everyday people looking for a loan. The lenders are also regular everyday people, but instead of seeking a loan, they are individuals who are looking to lend their money out for a return. They will usually pool their money amongst different borrowers to decrease their risks of defaults. Basically, these investors are the bank.
Why would someone want to borrow from Loanvia?
Some people may wonder why someone would choose to borrow from Loanvia when they can just go to a regular payday loan company. Those familiar with payday loan companies know about the bad reputation that these companies have. Many people even call them "loan sharks." This is because of the interest rates that they charge their customers. In the United States, the average cost for a two week payday loan is 15 percent. This comes out to an annual percentage rate of 390 percent! Certainly not an APR anyone wants to pay, but sometimes people feel like they have no other option.
Fortunately, with the existence of Loanvia, borrowers no longer have to pay those outrageous rates. When obtaining any loan, everything comes down to how much the loan is going to cost. Loanvia, gives borrowers the opportunity to borrow a minimum of $25 and a maximum of $500. When funded, the borrower can have the money directly deposited into their bank account, have a prepaid card shipped to them or have an instant transfer of proceeds sent to their Dwolla account. It is just a guess here, but instinct lead me to believe that most borrowers will want the money directly deposited into their bank account. The due date to pay back the loan will be visible before accepting the loan. This will usually coincide with a persons pay date. If a borrower does not have a job verified, they can choose to have their loan request as a personal loan. The same rules apply, but a person will be able to choose their payback date. The lender will know the already set up pay date before granting the loan. The maximum time to pay the loan is about 30 days. To pay back the loan, the money will be directly deducted from the borrowers bank account. If someone wants to pay back the loan early, they may do so. Also, if a borrower cannot pay back the loan on their due date, they may contact the lenders and get permission fro them to get an extension on the loan. There will be a small $5 fee associated with this.
When I first found out about Loanvia, I was thrilled. To be honest, this was an idea that I had long ago, but I lack the technical skills to put something like this together. I am sure glad someone did. I registered with Loanvia to see what it was like and browsed around the site to see what could be done. One thing that I quickly noticed was that as a registered user, you can both borrow money and lend money. I also noticed that there was not as many borrowers as I thought there would be. I don't remember the exact number of borrowers, but it was in the 10 to 15 range. It also did not seem like anyone was getting funded from the information that I was seeing. In actuality, the site seemed kid of new to me. The site did not give me the impression that it was a failed business concept. In fact,, it gave me the complete opposite reaction. It seemed like a site that was growing with popularity.
It was now time for me to apply for a loan. I applied for the maximum $300 payday loan and figured it was a hit or miss request. I did not really need the money; I just wanted to test the waters with the site. By the way, since that time, the maximum loan request has been raised to $500. Anyways, I applied for the loan and did not get any funding offered by any lenders, and my request expired in seven days. Alright, I thought to myself that it may be a good idea to request a smaller amount. I went on ahead and made a loan request for $100. I logged in a few day later, and much to my surprise, I had two lenders each offering $25. This gave me half of my loan request. As days went by, I still got nothing. On the last day before my listing was about to expire, another lender put in $50 to complete my $100 loan request. The $100 was deposited into by bank account just like it was supposed to be, and weeks later the $100 was debited from my bank account to repay the loan. Everything worked like a charm, and I was completely happy with the way Loanvia operates.
Loanvia, is currently only open to California residents. The website says that those in other states are able to register, but they are not able to borrow or lend any money. Some may wonder what the point is for them to register, but it sort of tells us the intentions of the company. Hopefully, Loanvia will be available to residents of other states in the future. I would advise anyone to register so they can be one of the first people to know when, and if the service becomes available in their state.
A person does not have to be employed to get a loan, but they will have to have some sort of income such as social security, disability or unemployment. There is no credit check done on any Loanvia members. When signing up, a person will have to identify themselves by providing personal information. Their address, email, phone number, drivers license number, source of income and bank account must all be verified. Recently, the site also started collecting members social security numbers as a security measure. I would also like to mention a cool feature Loanvia has. Every member has a score that is visible to all lenders. This score can go up or down based on a member's Loanvia activity. By being a responsible borrower or lender, a person's score will continually be on the rise. Good communication skills, adding contacts and other various activities will also help. By having a high score, lenders will have more confidence that a borrower will pay back their loan on time.
I would advise anyone to Loanvia when they need a payday loan. We can all relate to being in a situation when we need a helping hand. No longer are we at the mercy of traditional payday loan companies. We can all help our fellow man out and charge them a fair rate. I would love to rate Loanvia an "A.", but unfortunately, due to it not having as many lenders as I think it should have, I cannot. Hopefully in time, I will be able to come back and change this rating. As for now, it is good site but not great. In the future, I will be writing a review that is specifically targeted to those interested in investing in Loanvia. Of course, I will have to lend some money out first.
Rating - B
Please note: There has been a name change for Loanvia:
Just a couple of days after writing this post, the name of the Loanvia website was changed to LendFu. I have a new article here detailing any new changes that someone may find handy to be aware of.