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What Is Peer To Peer Lending

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By Author: Finway Capital
Total Articles: 96
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Personal Loan in Delhi and other cities of the country is a great way to answer the financial needs arising adhoc. It is this reason why so many avenues and sources are there which provide loans to the customers. P2P is one such source that is now common in all parts of the country. It is important that we understand what a P2P lending is and what are the advantages and disadvantages involved with it.

What is Peer to Peer Lending?

When money is borrowed without any intermediary source, this is called P2P. In this case, businesses, and individual operate without any formal paperwork. This may sound risky as most of the loans provided by the P2P source are unsecured loans. This is done through an online chain of work where a potential borrowers begins by filling up a form stating the need for a loan. After the application is received, it is checked and interest rates is discussed upon. Post which the application is approved and the applicant can get the money after discussing the way the money will be transferred. The credit history, in the process, is checked and based on which the interest rates are levied and Personal Loan in Delhi and India disbursed.

Advantages of P2P

High Return in Investment: The investors usually get a higher return as the interest rates although low, but does not involve any other fee. The investors are usually looking for small profits through this loan lending way.

Accessibility: With more accessibility to the online platform, it is considered rather easy way of lending and borrowing money from the investors. An Emergency Loan Online can be attained through this source.

Lower rate of interest: With a competitive market, the investors charge a low rate of interest. This makes it easy for the borrower and relatively profitable for the lender too.

Disadvantages of P2P

Insurance: In case of default by the borrower, there is no rule that a government should intervene and insure the lender's interest so emergency loan online cannot be provided.

Risk: With the maximum number of borrowers applying for P2P they have a low credit history. The lenders do not check this stringently and often risk their money. Lenders must check the defaulters and then extend the loans.

Jurisdiction: Under some jurisdiction P2P lending is not provided. This restricts the borrowing and lending Personal Loan in Delhi and some other cities too.

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