Without the need to go to a bank, one can borrow money from the P2P companies like Monexo. Loans can be borrowed for any reason, including education fees, medical bills, dental bills, tax payments, business start up or expansion, home improvement, automobile purchase, consumer goods purchase, vacation, wedding expenses, paying off the credit card loans or other reasons included in a traditional loan. Starting from Rs. 10,000 to Rs. 1,00,00,000 or more can be availed from these lenders. Both for the borrower, who requires funding and to the investor, who invests to earn some hand sum income, peer-to-peer is the ultimate solution.
Earlier, banks and micro-finance were the obvious choice for borrowing among the common people. The micro finance companies offer personal loans, lines of credit, business loan, auto loan, home loan, loan against property (LAP), etc., but at an exorbitant interest rate. Further, the approval process is stringent that many of the applications are rejected due to various reasons.
Peer-to-peer lending money online is relatively a new concept and is becoming highly popular. You can fix the amount to be borrowed; decide the interest rate that is affordable; and post it on the P2P website, where the investors bid on your needs. You can approve the lender, who offers a better interest rate for the required principal amount, and get it credited to your account.
The lenders and borrowers in Peer-to-Peer lending websites have direct contact. The direct contact brings greater advantages than the micro-finance. In the lender’s perspective, P2P has no less lenders advantage than the micro finance institutions. Here are the list of advantages when it comes to p2p lending.
With the highly advantageous digital platform, the approval is instant, unlike the micro finance institutions. Without any paperwork, the borrowers enjoy almost immediate approval, while the investors start to earn from their investment, within a very short notice of time. Just after the borrower submits an application, the P2P platform quickly obtains the risk factors, credit rating, affordability of the borrower, current EMI paid by the borrower and gauge the credibility of the borrower. Every portal follows a different algorithm for calculating credit rate. It might be based on reference or social presence or education or bank statements. The entire process gets over within a few hours and in monexo.co, it gets completed within a few minutes.
Loans for poor credit rate
Another matchless advantage is the P2P approves the loan application from a person, with a poor credit rating. In such cases, the borrowers cannot expect a lower interest rate, as they cannot avail a loan in the banks or micro finance institutions with their damaged credit rate. In the lender’s perspective, they can enjoy a greater return on their riskier investments.
Low processing fee
The bank loans and micro finance company loans include processing fees to pay the intermediates, who are involved in the loan process. On the other hand, the P2P lending websites do not involve any mediator between the lender and the borrower. Further, the overhead cost of running a website is pretty economical than running a full-fledged bank or micro finance office. Eventually, the borrowers are relieved from the burden of the heavy load of processing fees. Apart from the processing fees, the banks charge the borrowers for early repayment, while the Peer-to-Peer concepts encourage pre-closure without any penalty charges.
In addition to a lowered interest rate, P2P solutions can be the right choice during emergency scenarios like paying the medical bills, building renovation, wedding expenses, etc., Further, today’s business climate requires instant decision, immediate moves and fast actions to beat the competition. Dynamic P2P website portals help to meet the tough competition, with sufficient funds on hand, with the rapid approval process.
The P2P loan process is absolutely transparent without any additional fees or charges, unlike the banks and micro finance companies. The loan amount, payment schedule, interest rate, late payment charges, etc., are apparently discussed and hence, there is no hidden element. Since the process is based on trust, both p2p lenders and borrowers have direct contact with each other. Eventually, the relationship is strengthened. Reliable P2P portal monexo.co has partnered with CRIF Highmark Bureau India to study the payment behaviour of Indians and hence they can exactly predict the repayment capacity of the borrower.
Lenders are not restricted to any geographical space rather anybody who has internet access and money to invest can register in a P2P online lending portal and can start lending to the borrowers from different corners. Eventually, the possibility of getting a cheaper interest rate increases, with varied investors from various backgrounds. Major factors like no restriction on the investment amount; comparatively higher interest rate and availability of diversified investment in various options attract more and more lenders to invest in P2P portals. Without doubt, using a P2P website for financial needs is definitely a smart move.