The Intricacies of Peer-to-Peer Lending and Its Benefits
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Have you ever thought about lending online? It’s a bit strange that we are yet to abandon the traditional way of lending and take it to a whole different level, even if we’ve gone digital for almost everything else.
Peer-to-peer is the next step in evolution that makes lending a lot easier. And, that’s what the article is about.
What P2P lending does is that it helps you get a personal loan without having to go through the tiring process of banks and other financial institutions. Well, that’s just a surface view about P2P lending. Let’s go a bit deeper and see what it means.
What is P2P Lending?
P2P lending can also be referred to as social lending and is basically when people borrow and lend money from each other directly.
You know the way eBay eliminates the middleman between sellers and buyers? Well, the P2P lending platform we plan to launch gets rid of financial institutions like credit unions and banks when it comes to lending.
So, What are the Benefits of P2P Lending?
Now that you know what P2P lending entails, let’s look at its benefits.
It’s Faster and Easier
With P2P lending, you do everything digitally. Hence, you don’t waste much time. You can get the money you need in just a few hours.
The documentation involved with P2P lending is a lot simpler than with financial institutions. Plus, you can also communicate with your lenders directly and everything is transparent and secured on the Blockchain.
Better Eligibility Chances
It’s easier to have your loan approved with P2P lending than with financial institutions.
With banks, there are a lot of eligibility criteria that you must fulfill before your loan is approved. But that’s different with P2P lending.
P2P lending allows you to get a loan even with a bad credit score. And, if you are a borrower, instead of your credit score, your digital funds would be used as collateral, in case of default.
Lower Interest Charges
There are huge interest rates places on personal loans by banks because they are unsecured loans. However, P2P lending can get you competitive interest rates.
You have many lenders bidding for your loan. Hence, you can get your loan at a lower interest rate. This way, paying off your loan doesn’t have to burn a hole in your pocket.
No Hidden Charges
If you’ve ever tried taking a loan from a bank, you might have realized that there are charges to pay once you start the process. The funny thing is that you might not even be aware of these charges at the beginning.
With P2P lending, it’s a lot different. There are hidden fees or charges that you are told about. You are completely aware of the commission on loans from the start of the process.
Now, you can use your loan money for its primary purpose rather than having to spend it on unexpected charges.
To Wrap It Up
With its many benefits, it’s a wonder why P2P lending isn’t the go-to method for getting loans. Well, this will change soon once our P2P platform goes live.
Stay tuned with the next article and updates!
Great announcement soon to come.
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