Why Would You Borrow From A P2P Lending Platform?

All about P2P Lending Platform

Peer to Peer lending, commonly known as P2P is quite a simple way to get loans. Here, the money seekers get loans straight from individuals, called peers, instead of a classical financial organisation like bank. Peer to peer borrowing is advantageous, flawless, smooth and hassle-free and unquestionably win-win for the borrowers. There are a few reputed P2P lending platforms like LenDenClub where borrowers and lenders can connect and discuss their needs and aspirations in this regard.

P2P platforms help borrowers enjoy a few exclusive benefits

1. No Problem with Low Credit Scores

The most important advantage for borrowers of using P2P lending is that even people with low or poor credit scores can get loans seamlessly. When people with low credits approach banks and other financial institutions for a loan, these institutions may refuse for lending money and folks with such low rankings may land up in trouble while applying for a loan.

2. Lucrative Interest Rates

Peer-to-peer forums provide borrowers very economical and modest interest rates depending on their credit background and refund timeline.

3. Quick Speed of Approval

Lending money through P2P sites is faster, as compared to traditional processes. Loan seekers don’t have to withstand a lengthy waiting period for approval and to acquire the loan disbursement amount.

4. Economic Affair

Peer-to-peer lending websites like LenDenClub levy just one-time origination charge to validate borrowers and loan details. It is estimated that P2P loans are almost 70% cheaper than regular loans and credit card advances. Another benefit of using peer-to-peer lending is that one will not have as many charges involved. When a borrower applies for a loan with a standard bank or money lending institution, they will impose an application fee, processing fee and numerous other fees. One can also go for an early payoff without extra or penalty charges.

5. Exposure to Wide Network of Investors

Peer to peer lending in India offers exposure to a wide network of investors. Even though many lenders won’t trust to lend their money to people with poor credit score, there will be many other lenders who will be ready to take the risk.

Conclusion:

In a nutshell, the borrowers achieve a lot of benefits while lending from P2P platform. The summarised advantages are easy application and seamless sanction process. Every borrower gets easy and quick access to cash, and the interest rates are less expensive as compared to banks. Moreover paying off is also less expensive and hassle-free as the sites like LenDenClub do not impose any extra charges.

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Why Should You Consider Investing in P2P Lending to Grow Your Money?

With the emergence of the P2P lending, lenders and borrowers have found a convenient way of lending and borrowing. The lending platforms have created a new and good investment opportunity for those with secured income and those willing to invest and double the money. The P2P lending comes as a good alternative income source that works well for investors who will work out the risks involved and understand the workings of this unique platform. LenDenClub and other such platforms offer excellent opportunities where money can be doubled easily by investing in several loans.

Comparing investment options

There are several investment options that you can opt for. Every option comes with its own risks and benefits and therefore, depending on the preferences, one can choose the best investment option. There are several factors that need to be compared before choosing the option that suits investors.

Let us check how some of them work:

1. Returns on the saving accounts are famous for their notoriously low-interest rates. The returns are as low as 1.1%. Naturally, investors will think of other opportunities as well.

2. The stock market is a good option and can give returns up to 5%, but there are involved risks of up and down of the markets. In addition, any company you invest in may bust suddenly, and so there is a lot of risk here.

3. Investing in property was attractive till a few years back, but now with the economic slowdown, there are no takers. There is a dip in sales, and the prices of real estate are predicted to fall.

4. Luxury goods are also investments of a certain type as it is a tangible asset. Investing in gold is on the rise as the prices have been increasing steadily. However, prices may fall, and uncertainty prevails.

5. P2P platform is another attractive investment opportunity, which is fairly new and opening up to a large part of the world. It can help borrowers to borrow money online, and the lenders get a fat interest rate on the loan they lend to the borrower.

No investment option comes without any risks. The level of risks can be minimum or maximum. Peer to Peer lending comes with the moderate risk. The higher the risk, the higher is the rate of interest and profit. It depends on how you deal with loss and profits and how ready you are to risk your hard-earned money.

What Investors Should Know To Avoid Mistakes

Everyone wants to be a successful peer to peer lender, but there are many who simply cannot avoid mistakes. That is why today everyone wants to know the biggest mistakes that the investors make and how to avoid them. As the marketplace lending industry tends to grow continuously, the lending platforms will also grow. Money lenders are ready with the money but are careful about the investing options in peer to peer lending in India. LenDenClub is a safe and simple Peer to Peer lending platform for investor, making it easy to invest and get high returns on investment. However, it is significant that you as an investor know the basics of investing; where and how to invest when you enter the peer to peer lending platform.

1. Diversification is the key

This rule should be accepted by all to avoid an unpleasant experience. Diversify and do not put all your money in just one option. Spread your risk as widely as possible. There are hundreds of loans here, and you can study them carefully to make your choice. You have to minimize the risk of defaults and protect your money. Diversification will increase your profits than the defaults. At LenDenClub you can get wide range of borrowers with different interest rates so that it will be easy for you ti diversify your investment in different borrowers.

2. Start slow

If you are just starting out to invest, go slow; you do not have to rush and invest a large amount into loans. Smaller amounts will be better, to begin with, to know how the market responds and how your money is repaid. With small loans, you can be satisfied and will not panic in case of dreadful events. This can also be a good lesson for beginners.

3. Risk tolerance

Everywhere there is a risk tolerance, and everyone has a certain level of tolerance. You need to know yours as well before you invest the amount. Money lenders have to know the risk attached to it before investing. A low-grade borrower will bring higher yields but greater risks as compared to a high-grade borrower. LenDenClub makes it easy for you to understand the risk by segregating the borrowers in different risk categories, this will surely help you to invest wisely and safely.

4. Reinvest your payments

The moment you start receiving payments, you can sit and think of reinvesting. You do not want the cash to earn 0% for a longer period. At LenDenClub you can get your returns on monthly basis so now you can choose a better borrower and reinvest in new loans. With a diversified loan, you can earn more often, and this will give the benefit of reinvesting in other bigger or smaller loans. Do your own analysis and study the market and the company you are investing in carefully. Always check the borrower from time to time if you want to reinvest in the same company.