Peer to peer lending started being prevalent at times of the financial crisis in 2008 year – and it has got a quite logical explanation. The situation was difficult. Banks weren’t able to give money in credit to people at all. That’s why new methods and ways to get cash for people were to appear. One of such methods has gained an excellent popularity – it is peer to peer lending.
I can give you some arguments of p2p lending’s popularity. But is p2p for you? Read further and decide yourself.
What is p2p lending?
It’s right to say that p2p lending can be called “a banking without a bank”. The whole process of getting or putting up money doesn’t require any intermediaries. That is why, peer to peer lending really differs from usual financial institutions.
Chiefly, with p2p lending you don’t need to go anywhere – everything you need is a PC with the Internet. Those, who want to borrow or lend money, join different peer to peer lending sites to find profitable for everyone circumstances: for example, bigger return rates, which can’t be offered by a bank.
At the first sight, it may seem that high interest returns for investors may make the borrowers’ situation more difficult. But, typically, it is not so.
Should I invest in p2p lending?
Many people ask about investing in peer to peer loans, ask how much money they should have for their first capital investment. I’d say that it becomes very popular to invest in personal loans for getting income. Of course, everyone decides himself, but the returns from your investments are higher and it motivates more. And while other financial institutions offer you only 1 percent a year or even less, p2p lending investing can give you an income of 10% of your investment. Amazing, isn’t it? But it is also very important to find the right website in p2p lending Europe to get a high passive income. We recommend the well-known website https://grupeer.com
Of course, the risks are higher as well. But don’t be afraid – there some actions existing, which reduce the risks.
P2P lending suits you perfectly if you are a borrower. As a rule, p2p lending funds have got plenty of cash to lend out. So don’t miss your chance!
Some advantages of using p2p for borrowers
As I have told, peer to peer lending investing is an unbelievable thing for lenders, as it gives good income. But it is even better for borrowers, and here are some reasons:
Rates of interest – Of course, it mainly depends on the kind of the loan you’re taking, but on p2p websites rates are usually lower, than in banks.
Speed – P2P process usually does not last long. Peer to peer loan investings are quite fast too! From the beginning to getting money it takes you only about 2 or 3 days. By contrast, getting money in some banks takes weeks or months!
Application simplicity – The whole process is managed online, you can do everything, staying at home.
Even signing of the documents and verification are made online. The only thing you should take into account is having a scanning of them. Then you may put it to the website or simply e-mail them.
Anonymous application – While lending money, investors are not able to see your personality, they can only see a loan request of yours. In my opinion, it’s very important. Look! None of your personal information can be shared, as p2p is not a bank.
Purpose of a loan – In contrast with the banks, which can decline your application for your business purpose, p2p gives money for all your intentions. In this understanding peer to peer is more permissive.
Credit profile – For p2p lending your credit story isn’t the main thing. You will be given a loan even if can’t boast your ideal credit story.
No tete-a-tete meetings – Some of us are just nervous at the private meetings at the banks. With p2p you get rid of such problems. Use online website to obtain a loan and relax.
As you can see with such variety of advantages, no wonder that peer to peer lending is so popular.
How does it work?
Although, there are so many p2p lending websites and they a little bit differ in their work, some mutual moments can be defined. Usually, the structure looks like that:
You fill in a short form with the questions and then the website gives you “an individual loan grade”.
Lenders look through your advance request, then review it and decide, whether they want to invest at such positions or not.
The lenders’ interest to your loan is directly connected to your chance to get the credit. More interest – bigger chance.
You will be asked to provide some documents, confirming your solvency and an enumeration of existing arrears that you plan to pay out with the new loan (consolidations of debts and refinances loans are common at p2p platforms).
If everything is okay, p2p will send you the loan papers for signing.
After getting your signed documents, p2p funds are usually wired to your bank account within 24 to 48 hours.
At first, it seems that it takes long to make everything work fine. But if you are ready to quickly provide all the documents, the action takes just few days.
Variety of p2p loans
Prevalent loan types are mortgages and loans for business, personal or medical purpose.
Take into consideration that not all p2p lenders work with all these loans. Virtually every platform is specialized only with one or two mentioned types.
Investing in peer to peer loans becomes more and more popular all over the World. Online investments start to run the World. Maybe you want to join?