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7 tips for taking a car loan from family

Investigate peer-to-peer lending
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Borrowers who can't get an auto loan from a financial institution should consider using a peer-to-peer lending company such as Prosper.com or LendingClub.com before borrowing from family members and friends, says Beth Frazier, founder of The Women's Investment Group in New York City.

These sites match borrowers with individual lenders who may be willing to lend money that could be used to buy a car, Frazier says. But because the money is coming from a third party and not a family member, debtors don't have to face their lenders at Thanksgiving dinner.

The key to getting a loan from a peer-to-peer lending site is to convince potential investors to fund the objective. "On some sites, you have to be able to sell your story. That means explaining why you need a new car, and why it's necessary. If your story is not convincing, the lenders may not lend you any money," Frazier says.


 

 

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