Tackling the Barriers of Acquiring a Loan

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India is a close-knitted place where everything is celebrated like a family. In the time of need and disparity being with friends and family helps, since they stand by you even during the worst of times. Despite their help, taking and giving money can become a dreaded task, because of the complication that both the parties’ face.

The idea of knocking at bank doors

To avoid complicated situations, many people end up taking loans in a traditional way which is from the bank. These loanscome with repayment burden and while it's safe but yet not beneficial.

Here’s to the new idea: peer to peer lending

What is peer to peer lending?

As the name suggests it’s an easy and friendly process of taking or giving loans. Each platform providing this loan is visited by investors who can lend or invest their money to people who want to borrow, so this is how borrowers and lenders can connect without any third person interference.
It has been started remove the fear people have when they think about loans with a better and friendlier process.

What is peer to peer borrowing?

It’s a simple process where an investor and an individual contact each other to exchange funds; here instead of saving money investor lends money through online services. From application to apply, all the necessary procedure for approval and release of funds is all done online which reduces the hassle of getting into too much paperwork. As a lender, if you invest your money you get good returns and in this way, you get to earn a secondary income every month.

The typical feature of borrowing from this platform

This kind of loan comes with a low rate of interest, to ensure you get the lowest always compare to different financial institutions. Due to competition among investors of different companies, they try to attract borrowers by offering finance at a low rate.

Depending upon the money to be borrowed you have to pay initiation fee; compared to bank the fees are usually at the lower side. Then there is a penalty for late or missed payments.

It’s a quick and easy process, everyone will say that taking a loan is a difficult process and the fear of acquiring a personal loan still persists. Such P2P platforms are trying to tackle that fear and each one has created a hassle-free process which caters to their customer’s needs and builds trust amongst them.

The importance of credit score

P2P lending platforms have a different way of calculating the credit score which includes aspects from your life, such as social media activity, your salary, your expenses etc. It doesn't just depend on your past repayments and thus even a low credit score person who possesses the capacity to repay can acquire a loan at these platforms.

Why personal loans?

There are variousdifferent types of loans that the borrowers can choose to get a loan from.However,personal loans are the most common P2P loans with no collateral involved in the process. They are flexible as well since it can be used for any purpose. When it comes to taking a business loan you can take a secured loan as well, as it benefits the lender as well, in case of any default it can, however, seize your security.

How safe is to borrow with this funding

Along with safety and trust come along the need for a simpler and transparent process.
Information revealed by you is completely secure and confidential. Since there is a lot of competition among the lenders the interest rate is usually low.                                

Advantages of borrowing for your business

With low interest rates and quick funding, these loans can help in paying for ongoing expenses or for expanding its dimensions. With a flexible repayment plan, this can help you start your work without any hassle.

Challenges that you might face

Every lender associated with peer to peer lending checks credit score, if you have a poor or low score you might not be able to avail one.

Though these loans can get instantly funded to you and sometimes lenders might not send full amount at one go. There is a penalty for any kind of default.