Marina Thomas, WED | P2P or peer-to-peer lending is an unconventional funding phenomenon that has gained immense recognition ever since the financial meltdown in 2008. The process of P2P lending can be perceived as a non-bank funding since there is no role of traditional banks in this procedure of lending and borrowing. It is a blessing for borrowers who generally run small businesses or entrepreneurs who have just started their business campaign; P2P lending can solve a whole bunch of financial problems.
What Is P2P Lending and What It Has for Borrowers?
There are many benefits of opting for a peer-to-peer lending service, but first, it is necessary to understand how this unconventional non-banking process actually works. Starting with the nature of P2P lending, it is mostly done online at peer-to-peer lending websites. For borrowers, a P2P lending website is a perfect platform for getting a loan at much better terms and often at appropriate interest rates, something which they failed to attain with traditional banks. With that being said, here are some of the benefits that make P2P lending an ideal alternative funding solution when borrowers fail to achieve a loan from other sources:
Easy to Apply
Perhaps the best reason that makes P2P lending a great alternative to your local banks is that the form filing or application process is much easier and simplified for the borrowers. All you need is to sign up with authentic P2P lending sites When you are done with the signing up step, you will be provided with a pool of lenders who are ready to lend you the money after evaluating your situation carefully. For this, you will need to show legitimate reasons and inform the lenders about your purpose of acquiring the business loan. Borrowers need to make their application intriguing and attractive to compel the lenders to invest the money in their business.
Less Time Consuming
The loan processing speed entirely depends on your application and financial status along with your credit history at times. Although, credit score is the primary reason why small business owners and entrepreneurs fail to get the loan from banks quickly, something that is entirely the opposite when opting for peer-to-peer lending. With a P2P lending platform, you can get your loan within 24 hours to 2 weeks, as the number of participants in these platforms is incredibly higher compared to the likes of traditional banks. The process is quick, owing to the transparent nature of the P2P platforms where everything is designed for better borrower and lender experience.
Reasonable Interest Rates
When you try your luck at P2P lending websites, you will be offered loans at bank-like interest rates that are generally reasonable. After your application gets approved, you will be given the opportunity to choose your loan repayment time frame. As you adjust the time period according to your financial capacity, the interest rates will be appropriately fixed according to the term of the loan.
Peer-to-peer lending channels are a blessing for borrowers who want to secure funds for meeting their legitimate business requirements. Keep the aforementioned benefits of P2P lending in mind and choose the suitable platform that can cater to your needs.