Finding Similarities Between Loans and Life

Reasons behind the Emerging Industry: Peer-to-Peer Lending Peer to peer lending is an emerging option for loan transactions wherein you can apply for any type of loan such as but not limited to personal loan, car loan, student loan, business loans, and even for the sake of consolidating your loans. Despite being new to the business world, P2P has still attracted lots of people. The industry is growing fast and many people find the industry very helpful that they don’t tend to look for other sources. On the part of the borrowers, the bank’s role is to help find a lender. On the side of the lenders, their basic task is to perform due diligence so that there will be proper credit checking and they also collect payment. The role of the credit checking is to ensure that the lenders are able to secure their business by validating the client’s qualifications as well as the determination of the maximum loan amount granted and the interest rate.
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Why is peer to peer lending very popular to borrowers? There are a lot benefits from it. One common reason is that you can consolidate your debts and pay them immediately. Most of the time, the rate charged flower you is a bit lower compared to other forms of consolidation and you can even payoff the loan in the end of your term. Your next reason is the ease of seeking for fund. If you are planning to start your own business and you need to apply for a loan, going to the bank might just not be a good idea. But in the case for P2P loans, lenders are the ones who are searching for persons like you. The funding of your loan depends on the selling stage of your loan in the market place. Next, in terms of the interest rates, this type of lending provides lower rates. As per report, lenders often enjoy the 6% interest rate but still subject for credit standing. The interest rate is indeed lower compared to credit cards and the interest rate is not allowed for changes.
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But why is P2P loved by lenders? The biggest reason is how much you are going to earn. The rate of 6% to 19% are basically the rate of returns as per reports of the lending club. The rate of return your enjoying is definitely very high compared to other forms of investments. Next is the fact that the lenders perform due diligence to their possible clients based on initial credit screening. The default rate should not exceed 2%. The default rate is in fact very low even though the nature of this business is not having collaterals as back up and therefore, it is unsecured type of loan. Also, lenders are not allowed to stop funding because lenders must fund more loans.