From sending money to selling furniture online; global online marketplace has come a long way. But, when it comes to borrowing money, friends and family members are still our first resort. Indians till date rely on traditional ways of borrowing, from those pawnshops and loan sharks; who charge unfairly high interest rates, typically under illegal conditions. Thus leading to the dawn of P2P marketplaces.
What is Peer to Peer Lending?
The first P2P lending platform was Zopa, launched in 2005 in European market; that successfully employed the concept of shared financially economy. Today, Peer to Peer Lending platforms has completely digitalized the lending realm. It offers individuals a tech-savvy online platform to lend or borrow; without the inter-mediation of any official financial institution. The lenders registered with the P2P lending platforms invest in consumer loans to get returns in the form of interest rates. The interest rates are set either by the lending platform itself or on the mutual agreed terms between the lender and borrower.
Services offered by P2P lending platforms –
1. Online investment platform for lender/savers to earn market beating returns
2. Enrolling new lenders and borrower with the platform
3. Offers Lending account for lenders for online transactions and investment
4. Screening borrowers by means of robust credit checks utilizing their own algorithms and analytics tool.
5. Loan processing and approval for borrowers
6. Customer service to borrowers regarding Personal Loan needs and credit needs
7. Forwarding loan repayments from borrowers to the lenders who invested in the loan
The P2P lending follows a crowd-funding to raise loans. You can simply sign up online with these P2P virtual credit marketplaces to open your lending and borrowing account.