You purchase everything online, whether it’s investments or groceries. Why not do your lending online, as well? Doesn’t it seem a little odd that when we lend money, we still depend on traditional ways, although we’ve gone digital for everything else?
Peer-to-peer lending is the new lending system that makes borrowing money easier than ever. Let’s examine how this works.
Nobody likes the tedious task of completing various forms, supplying numerous documents, and then waiting for to see if a loan is approved. Even after all of this effort, you can’t be sure that the bank will actually approve your loan.
If you do not have a high credit score, or if your salary is lower than their minimum cut-off then the loan you request may not be approved. Turning to friends or relatives to ask for a loan can be an embarrassing process.
Wouldn’t it be amazing if you could obtain a personal loan without dealing with the formality of a bank or the embarrassment of asking for a loan from relatives? Working with a P2P platform can help.
P2P lending platforms, which are also known as peer to peer lending platforms, work as intermediaries that easily connect lenders and borrowers.
Let’s examine some reasons that working with an online platform is better than other learning methods.
Quicker and More Effective
When you work with an online lender, everything happens digitally. This means that it takes a lot less time. Your loan can be processed and approved in as little as 72 hours. The documentation is also much simpler when compared to what bank loans require.
You’ll generally be asked to provide salary information, identification documentation, and bank statements. You’ll need to send these in digitally. Then you’ll be ready to get started. You’ll be able to interact with various lenders on the platform in order to obtain a loan. It shouldn’t take more than about five minutes to get registered on this type of platform. Keep your documentation handy.
Lower Eligibility Criteria
Getting a loan approved from an online lending platform is far easier than getting it handled by a bank. Banks have a large number of eligibility criteria that a person has to meet before they’re eligible to get a loan approval. For those who work at lower salary brackets, it can be even harder to get full loan approval. Moreover, if your credit score is too low, you can forget about a bank considering you for a loan.
The same is not the case with online lenders. You can get a loan from them even if your credit is less than stellar. People who have salaries that are quite low can also get approval for a loan from several online lending platforms. For first time borrowers, instead of a credit score, social verification is used to determine trustworthiness. You can link your social media profiles to your lending platform account. The platform then uses these accounts, as well as other financial, occupational, and personal information to determine your credibility. This can make it easier than you’d think to get a loan from an online lending platform.
Lower Interest Charges
Banks often charge very large interest rates on personal loans, as these are unsecured. With online lending, you can obtain a more competitive interest rate. Often, lenders bid for your loan which can make it possible for you to get the loan at a much lower rate.
Repaying the loan doesn’t have to cost a fortune each month. You don’t have to sacrifice your quality of life in order to pay steeper interest rates.
No Hidden Charges and Fees
Have you ever attempted to borrow money from a bank? If so, then you know that once you begin the process, you start getting hit with charges and fees. There are so many fees and charges that are hidden from you in the beginning of the process. It seems like you’re sending money every day or two, once the process starts.
This simply isn’t the case with online lending. There aren’t any hidden fees or charges. In fact, most platforms have the full registration fee and any other charges on the loan at the start of your registration.
Aside from that, you’ll owe nothing in order to apply for a loan. You’ll actually be able to use your loan money, rather than wasting it on multiple charges and fees.
There’s Also No Penalty For Repaying Your Loan Early
Let’s say that you sell some stock and get a decent amount of money. You’re considering repaying the personal loan that you took out at the bank. However, the bank will want you to pay a penalty for paying off the loan early. They’re essentially asking you to pay a high fee in order to give them their money back before the loan is fully mature.
This should be a good thing, making a payment early, but apparently, they don’t see it as such. Not with online lending platforms. They allow you to easily pay off your loan before its full length without a hefty penalty. Most charge only a small prepayment penalty.
With all of these features, why wouldn’t you choose online lending over the brick and mortar options? It’s easier, cheaper, and faster. So, what are you waiting for? It’s time to take your lending into the digital age.
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