Peer to peer lending is getting more popular these days. This is where you don’t have to borrow money from a huge bank or lending firm. Instead, you can get money directly from another person with the help of a third party organization. The process is a lot faster. Everything can be done online. Your application can be granted in a few minutes, and you can borrow money.
In the same manner, if you have enough money to spare, it is also a good idea to lend it to other people through peer to peer lending programs. Here are some more reasons for both lenders and borrowers.
Reasons for borrowing
The ease of application is definitely the main reason for choosing this type of loan. When you are under too much financial stress or you have an emergency problem to attend to, this could be the help you need. In just a few minutes, you will get your loan as long as you have an account where the money can be transferred.
The low interest rate is also another benefit for this type of loan. The average is around 7% which is considerably lower than regular banking options. The repayment scheme can also be flexible, and the interest rate depends on the length of time that you have agreed to repay the loan.
You can also borrow really small amounts through this program. Sometimes, you just need the money to pay a bill or something that requires immediate payment. You know that you can repay it once your funds come in, but you don’t have them as of now. This is where peer to peer lending really helps.
Reasons for lending
This idea also works well for people who wish to lend their money. This type of loan works well for everyone. Yes, the interest rate is lower, but it also guarantees that the people who have borrowed an amount can repay it. The returns are quite high too. The average is around 10% which is already a good deal if you just simply lend the money you don’t need. You might also worry that people who wish to borrow money can be granted what they want right away.
The truth is that they have also been vetted and have passed identity verification. Even if there are risky borrowers out there, lenders are still allowed to choose where to invest their money. You can check the reason for borrowing and you can decide to say no if you think it is too risky. For instance, if someone is borrowing the money to consolidate credit card debts and you think this person is in deep financial trouble, you can reject it and pass the chance to other lenders.
You just need the best peer to peer lending program so you can decide which one would be worth it whether you are a lender or a borrower. Many people have tried peer to peer lending before and only have positive words to say.
Disclaimer: This content does not necessarily represent the views of IWB.