Peer to peer (P2P) lending serves as an online marketplace that brings together lenders (people who have savings) in contact with borrowers in need of funds (in in the shape of loans for personal use). This Fintech innovation is changing method by which credit marketplaces function. Through completely bypassing banks and allowing faster the process of borrowing and lending. Investors get better rates of return that are adjusted for risk, and the borrower gets speedy credit at low-interest rates. Since it is an online platform where readmore two parties interact, you can either be a lender or a borrower.
Personal loan applicants can register online. They can register online. P2P lending platform uses data and technology to assess the creditworthiness of a borrower. You will be assigned a risk-class with a suitable interest rate after your credit assessment. Credit-worthy borrowers get loan disbursed in minimum possible time. If you register as a lender/investor, your bank account will be opened via an online lending service. You can invest in consumer loans beginning with an amount as low as 15K. You are able to pick the loan you want to invest. You can build your portfolio by picking loans from various risk classes.
The moment the borrower begins paying the interest rates you are able to receive the interest as EMIs (principal as well as interest). P2P lending offers inflation-beating returns greater than bank savings account or fixed deposits. It is possible to withdraw money or invest to reap the compounding advantages.
What can P2P lending offer that is unique?
1. Online Application Method: Money Lending Online is an easy method to access capital in the way of personal credit. This is completely different from the traditional loan approval procedure of Credit unions and banks which requires you to apply manually by filling lengthy forms and visit banks to verify the loan’s status. In P2P lending the entire loan application process is conducted online. It is all you have to do is sign up through the website and register as a borrower. After uploading all the necessary documents your loan will get approved depending upon your credit score and eligibility.
2. It is easier to get a loan A credit union or bank will determine your eligibility for loans solely based on your credit history (CIBIL score). Online money lenders use additional evidence to judge your creditworthiness which includes your education and income per month, your credit-to-income ratio, as well as other relevant financial parameter.
3. No collateral needed: P2P lending can provide personal loans. You don’t have to pledge collateral or offer any other security deposit to get the loan approved. So, if you do not pay off the loan in a timely manner, you’ll certainly be subject to legal action but there’s no chance to lose property.
4. More favorable rates: The lenders charge an interest rate that is lower than institutional lenders like banks. Through P2P lending platforms, you can benefit from lower rates while paying no service charges (if they are applicable). P2P lending companies do not have to pay the same overhead as in the case of banks, which means they aren’t impacted by the same regulation cost. In the end, you pay no interest rates on personal loans.
Want to apply online?
Peer to peer lending is direct communication between lenders and borrowers by eliminating the need for intermediaries. Before you apply for personal loans through P2P lending websites, make sure to perform detailed research online. Select a reputable and accredited platform. If you’re thinking about becoming a lender, then invest carefully after carrying the proper due diligence for every risk class to get more money.
Faircent is the largest Indian online virtual market place that connects investors and investors. By registering into the system comprised of Online Money Lenders in India you can reap the benefits of a clever strategy to reap higher returns from online Investment. Small business owners and entrepreneurs as well as the general public have access to personal finance with flexible terms , and at low fixed rates.