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Reasons Why You Should Give P2P Lending a Try

by Wendi Daniel (2020-01-24)

Let's start with what is P2P lending.

7yytfc302w.jpgP2P or Peer to Peer Lending platform connects borrowers looking for a loan with lenders looking to lend their money to earn returns. These platforms, similar to banks, does the credit verification of those looking for a loan and if eligible, lists them on their online platform. Investors/lenders can come, see the profiles listed and decide if they want to lend them the money or not.

Now, if you think the money you have kept in your bank is for safekeeping, you are wrong. The money deposited in your bank, is used by the bank to lend to those who are looking to borrow. So what interest you get in your savings account is because someone else is paying an interest to the bank, which the bank is giving back to you. However, whereas a bank gives you the interest of 3% to 6% pa, they charge borrowers almost 10% to 20% pa. The difference? A whopping 7% to 17%. That's the earning of the bank.

P2P Lending helps you become your own bank. It gives you a higher rate of interest to a lender and also a lower interest rate for borrowers.

There are several online P2P lending platforms where you can lend or borrow money easily. You neither have to go through the tedious process of applying for a loan, nor wait for several days to get your loan funded. It is now instant. You get your approval in a few hours and money disbursed in less than 48 hours.

As a lender you also have many benefits. You no longer have to waste your money sitting in a bank account with such low interest rates and lend through P2P lending platforms to earn upto 48% return. Unlike Mutual Funds, in P2P, you get your principal + interest back every month. These returns can be reinvested as you receive the EMI from borrowers to further increase your earnings.

It is a win win situation for borrowers too. Since the banks are no longer involved in the process, removed. Hence the borrower pays a lower interest rate while enjoying the latest features and advance technologies.

P2P works great if you are looking to diversify your funds as well if you are already investing in Mutual Fund, Equity, 토렌트 보안솔루션 Gold, FDs etc.

Is it safe to invest in P2P lending?

No. Similar to any other investment asset, P2P comes with its own risk factor. If a borrower defaults, you could lose your full or part of the principal invested amount. However, since the returns are good, you can diversify your portfolio across multiple borrowers to reduce your risk and still earn a great profit. Not only that, but also to protect your money, many P2P lending platforms offer you recovery services and legal support. Therefore, selecting the right P2P lending platform is very important or else you could lose more than you earn.

Be it a borrower or lender, peer to peer lending has benefits for both. It is also being used by thousands of customers across India. You can choose to ignore P2P lending, but looking at RBIs latest regulatory guidelines, P2P is set to grow further and faster.

So, have you tried P2P Lending yet? Let us know.

Peer to Peer Lending in India is growing lending and borrowing platform that will surely help both financer and borrower.