Isn’t it more convenient, if you can borrow/lend money from/to peers rather than the traditional system? Well, it is possible! That’s where the concept of peer-to-peer lending comes into picture.
What is Peer-to-Peer lending?
Peer-to-peer lending is the practice of lending money to individuals or businesses through online services that match lenders with borrowers. Since peer-to-peer lending companies offering these services generally operate online, they can run with lower overhead and provide the service more cheaply than traditional financial institutions As a result, lenders can earn higher returns compared to savings and investment products offered by banks, while borrowers can borrow money at lower interest rates.The borrower and the lender can exchange money directly rather than the traditional way. This process is more dynamic in nature as compared to the traditional one because the money flow is continuous and in the money is in the market.
Why one should opt for peer-to-peer lending?
Here is the list of major advantages of choosing peer-to-peer lending over the traditional system:
- Better Interest Rate: One of the major benefits of peer to peer lending for the borrowers is that it offers interest rates that are much better than most of the financial institutes. Also the returns that the lenders get is much higher than usual saving accounts or other investment. Which means that peer-to-peer lending is profitable to both the parties involved in the transaction.
- Socially Conscious Investment: According to the current stats, we can clearly point out that our economy is divided into sections. The peer to peer lending ensures a system with dynamic flow of money and aids the financial discrepancy that is existing within the system.Mr. Norman Ralph Augustine completely describes the main motto of peer to peer lending in his Quote “It is Very easy to get a Loan unless you need it”. Basically, with the help of peer-to-peer lending, the people who have cash flow can help the individual who is facing economical crisis directly without going to traditional system where the cash flow will remain stagnant for years.
- Diversify the risk: Peer to peer lending provides the lender for the opportunity to diversify his risk into various portfolios rather than just investing in one stock or giving money to just one person making his/her money more secure. To know more about peer-to-peer lending, you can get in touch at : www.financepeer.com or email us at : email@example.com