Anyone who is seeking for a loan may it be for the purpose of purchasing a car unit, for education purposes, for business capital or even for paying all your debts, peer to peer lending is the best option for you. The P2P lending is just an emerging industry but it is already a standalone. It is indeed a fast growing industry that is why people who have heard of it wants to try and they even consider it as the best option.
Borrowers will assume that the bank can help them find a lender. On the side of the lenders, their basic task is to perform due diligence so that there will be proper credit checking and they also collect payment. The role of the credit checking is to ensure that the lenders are able to secure their business by validating the client’s qualifications as well as the determination of the maximum loan amount granted and the interest rate.
Why are more people patronizing the peer to peer lending? There are a lot benefits from it. One common reason is that you can consolidate your debts and pay them immediately. You can even get a lower rate compared to other means of consolidation your loan and you are capable of paying the loan based on the term of the loan. Another reason is the fact that it is easy to seek source of funding. If you trying to apply for a business loan from a bank, the tendency is that you will just be rejected forcing you to apply to other banks. But with P2P loans, they are the ones who find you. Your loan application will become an opportunity to potential lenders that are willing to fund it. Another reason is that the interest rate is often low as compared to other form of personal loans. As per report, lenders often enjoy the 6% interest rate but still subject for credit standing. Compared to credit cards, the rate is lower and it is not subject to change.
Lessons Learned from Years with Funds
But why is peer to peer lending very popular to lenders? The top answer is your earnings. The rate of 6% to 19% are basically the rate of returns as per reports of the lending club. The range of return in terms of percentage is indeed very high compared to other investment companies. Next is the fact that the lenders perform due diligence to their possible clients based on initial credit screening. The limit for default is 2% or lesser. This is already low even if the loans are unsecured and no collaterals were presented. Also, lenders are not allowed to stop funding because lenders must fund more loans.