Peer-to-peer (P2P) lending platform, allows individuals or entities to lend their unused money to other individuals (borrowers) as an unsecured personal loan. The borrowers then return the amount to the lender with added interest. The interest rates are decided as per the standard guidelines.
The P2P system is revolutionary lending model for the lenders, as it avoids intermediaries such as banks, and financial institutes etc. in processing loaning or lending activities. The lenders get to network with borrowers under one-platform at loanbaba.com.
Lenders can diversify their portfolio. In contrast to other lending options, peer-to-peer lending is a class-part option to get healthy financial profits from putting money in consumer credit and peer-borrowing.
Here are some of the advantages that peer-to-peer lending platform has for lenders:
1. High and Guaranteed Returns
Lenders get to set an attractive interest rate, so there is flexibility to manage the return they derive from repayment. Returns are generally higher than ones resulting from traditional mode of lending. There is guaranteed return, and in case the borrower defaults, there is a subsequent penalty. As against low returns on fixed deposits, peer-to-peer lending serves a better space for higher monetary take-back.
2. Lower Risks
Compared to mutual funds, equity or stock markets, where the investor is at the risk of losing money due to market turbulence, peer-to-peer lending is a comfortable space for investing idle money and getting assured monetary amount back, with substantial gains.
3. Safe Lending
Not only does P2P service help lenders to get a better option of returns, it is also a safe lending support service system, where the facility to interact with pre-verified borrowers is one of the best USP. The borrower’s financial and personal background is checked, along with credit report and necessities, so as to lessen risk of repayment failure.
4. Lenders’ Choice
The ones lending money are not disappointed, as they get to choose which borrowers they would want to lend an amount, and decide how much to lend. Lender can browse requirements posted by the borrowers, and as per their discretion, choose the borrower for lending activity.
5. Bargaining with End-users
Before closing a deal, the lender can negotiate directly with the borrower upon the said amount for borrowing, and applied interest rate, apart from other transaction aspects. After the lender is satisfied with the decision, he/she can proceed with the peer-to-peer lending.
6. No Collection Worries
Transacting directly with borrowers means a trouble-free process, as the lenders do not have to themselves collect the repayment amount from borrowers: but loanbaba.com does it all for the registered lenders. So, lenders get their money on time without having to visit the borrower.
- Also, the lender gets the chance to fulfil social responsibility- the ‘good feeling’ of financially helping someone.
- Minus the intermediary, the lending process gets simpler and easier to understand. The lending method is quicker here at loanbaba.com.
- The lender gets to monitor his/her activities without interference from anybody or anyone. P2P platform is also strictly regulated by the service’s provider, so that the lender can be at ease and earn handsomely.