Banks suffered a major loss during the financial crisis of 2008-2009. This resulted in reduced loan disbursements with substantial inspection and tighter processes thereby inducing dissatisfaction among public. This atmosphere unlocked gateways for smaller companies with bigger technology to rope in and encourage the idea of alternate financing. And there came P2P lending playing a crucial role in financial disruption through technology, referred to as Fintech.
With the Banks tightening their finance processes, the fast-growing financial model of “Peer-to-peer lending” is revolutionizing the global financial market. This budding platform is reshaping the finance industry since past few years with new and innovative modules introducing new lending services.
P2P lending platform industries are deeply relying on technology. Lack of the accurate technology, P2P lending platform can be intricate, cumbersome, and pricey. Thus, one of the crucial decisions any lending service provider need to make is whether to develop the entire system in-house OR to go with a readymade lending software OR to license a white label lending platform.
We are aware and experienced about the tedious and time-consuming process of banks for approving loans. Custom designed P2P lending platform is the best alternative to the old-style exercise of borrowing money from banks and nonbanking financial institutions. In the world of fintech Instead of approaching banks and applying for loans, visualize an alternative platform online – where we only have to fill few necessary information, all from sitting at our home/ office from our convenience and within hours our loan is processed and approved.
P2P lending is growing rapidly to new product categories because it offers an improved experience and passes on the benefits of using technology to borrowers and lenders
How P2P Lending Platform Function?
Peer-to-Peer lending is working on the model where the person has to decide how much he wants to lend and for how long, then people sign up to the platform as a lender. The borrower submits a request for loan processing. The lending platform then make use of online data and technology to rapidly evaluate risk, figure out a credit rating and allocate an apt interest rate. It takes an hour or even minutes to complete the whole process. Now the loan is available for investors to fund.
Why is it So Popular?
Peer-to-Peer lending has appeared as one of the popular industries in FinTech with a fast progress track and billions of dollars created in loans every year. There are some benefits of P2P lending in many different markets:
Benefits for Borrowers
- Lower Interest Rates
- Fixed Interest Rates
- Simple and quick application process
Benefits for Lenders
- Higher returns to investors
- easier to understand