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Financing

Ok. I want a Yurt. Now, how do I pay for it?

We get the question all the time: is there financing available on yurts? The answer, in most cases, is a regretful “no”. Some people have used non-traditional finance companies, others are able to finance with credit cards; but most traditional banks turn down loan requests for yurts. They just don’t know how to classify them.

All that just changed
There is a new option for yurt financing. It’s called peer-to-peer or social lending. In simple terms, social lending is a financial transaction between two people without the intercession of a bank. If you’ve ever loaned $5 to your little brother, you’ve participated in social lending.

These days, thanks to the internet, social lending is taking place on a larger and more complex scale. Websites have emerged that connect people that want to borrow money with people that want to lend it. The largest and most well-respected sites are prosper.com and lendingclub.com. There are some important things to know before you jump into social lending. So, keep on reading…

It works like this

• Social lending sites vet potential borrowers for good credit and a favorable debt to income ratio.
• Borrowers make a loan request (stating the amount of money they need and what they need it for).
• Interested lenders get together to fund the loan at an agreed upon interest rate.*
• The site consolidates the loan and deposits it into your bank account.
• Borrowers pay the site a small percentage of the loan.
• Borrowers send loan payments to the site, which then distributes the payments to lenders.
• It turns out that interest rates on these sites tend to be favorable compared with your average bank. Unlike credit cards, they don’t change your interest rate halfway through payment. But remember: every loan is different, so be sure you’re getting a good deal!

To get a peer-to-peer loan you need (at minimumm) to

• Live in the US or be in the US military
• Have a US bank account
• Be able to use the internet (if you’re reading this, you’re covered)
• Have good credit

Jump in:
Research the different sites. When you’re ready, put a loan request out and see what kind of interest rate comes back. Sites let you leave your loan request up for 7 to 14 days, so you’ll know if you’re going to get a favorable deal in a short amount of time (with some sites you’ll know immediately) and you can always reject the offer if you don’t like it. Be careful with this: Some sites lock you in as soon as your loan is 100% financed.

Know the rules of your site

• Check to see what (and when) the site charges you for their service.
• How it determines your interest rate.
• At what point you are locked in to the loan and obligated to pay it.
• Monitor your loan carefully!
• Don’t accept any loans you can’t pay off but see peer-to-peer lending as a positive and unique way to get your yurt financed. With a bit of luck and a lot of good credit you won’t have to shell out much interest!