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Economy bridge investment through P2P lending platform


Hello all good peoples welcome again to a new  chapter of your financial knowledge I hope these blogs are increasing your financial knowledge and making your money work for you So now coming to the point in previous blog I had written about investing money by lending it to someone and share various demerits and merits and risk involved in it so today we will talk about investing money in peer to peer websites as called as peer-to-peer money lending platforms.

INVESTING THROUGH P2P MONEY LENDING OR PEER TO PEER MONEY LENDING PLATFORMS

risk in money lending


PEER TO PEER MONEY LENDING IS A PLATFORM WHERE MONEY LENDERS MEASURES TO BORROWERS OR BUSINESS WHO ARE IN NEED OF MONEY. For better understanding here is picture explanation of this system below




Most of this platforms are online so in online peer to peer lending platform the lenders can choose expected interest rate and time to get back money and can also choose need, interest rate, tenure etc . The system matches the best lender to borrower and borrower to Lender . As an investor you get higher interest rate compared to banks because this is direct deal between Lender and borrower here peer to peer p2p lending websites exist as space to fair deal. The first p2p lending platform is registered in USA in 2005 named as ZOPA .It is quite successful and in profit till now ,after this laws are made for establishment of p2p platform and making system fair and transparent to the lenders in borrowers. In India p2p lending platform are regulated by NBFC for non banking financial corporations which is part of RBI Reserve Bank of India.



HISTORY OF P2P LENDING PLATFORMS AND PRESENT FORM


After zopa many lending platforms come into existence .So there is a strong need of any regulating authority like FDI in USA RBI in India etc. in present p2p lending platforms are not able to create a big market in the economy instead of their need. So we can say that this market is still in the bornstage.


HOW YOU CAN INVEST YOUR MONEY THROUGH LENDING PLATFORMS


If you want to invest your money through lending platforms then firstly you have to create account on platform this will include contact number, name, address ,proof of income, government Unique Identification document like Aadhar in India ,income tax number ,profile pic, Gmail ID etc. Then your profile will be created after verification via OTP . Some websites also take registration charge which is vary from $5 to 20 Dollar according to websites and locations. after your successful registration various options are available in various websites to determine your financial goals like rate of interest ,amount of money, time ,amount of preferred installment etc. then website will show your profile to persons who needs money and borrower can put request to You and you  will be notified whenever someone request money from you just like Facebook friend request system.you can look to borrowers profile, income details, income proof, history of previous loans, CIBIL score etc. Then after successful verification by you You can lend money to the person.
After giving loan the borrower pays money installment is fixed you will receive money as soon as borrower pay money to the payment panel of platform.
The whole process of those lending websites is fully fraudless on account of transactions As we are transferring money to the platform not to the borrower there are also many charges which this peer-to-peer platforms take if borrower delays the payment. There are also many advanced options nowadays like paying small amount and carry forward your installment In many countries the government also give permission to affect CIBIL score or credit score as it gives more transparency and control to landing system.

FUTURE OF P2P MONEY LENDING PLATFORMS.


Till date p2p platforms had grown slow as expectation because the idea behind this lending platform is great which is to join the person who needs money to the person who have extra money. P2p's is great form site to investor as well as borrower but the companies are not able to create a big market space in economy and loan business due to lack of marketability, advertisement, Reliance, financial awareness, literacy and ruling body not taking interest in growth of their market but future of p2p lending platform Seems bright as banks are also started taking interest in it as well as investors are investing part of money in this. In future the use of this website is expected good due to increase of literacy ratio and increasing marketability.

If government and banks take interest in it then Masive growth can happen in this Industries full of opportunities.



BENEFITS AND MERITS OF P2P LENDING


1) There is no entity between lender and borrower.

2) The rate of interest is good as comparing two Bank deposit.

3) The money is almost risk-free.

4) The tenure of investment is as you wish.

5) The transactions are fully transparent on the side of lender and borrower and fraudless.

6) Hair platforms help in recovery if borrower fails to pay installment and defaults loan or not able to pay installment at all.

DEMERITS OF P2P LENDING PLATFORMS


1) As our teams researches on terms and condition of these companies. Says that the the website is is just a platform to meet lenders with buyers we do not guarantee your money II if borrower not pay your money this is worst part of this platforms if they are not working on persons credit score but this platforms help legally in recovery of money they have special department also. Food safety E for safety you should check ok defects of profile of borrower.
2) All the p2p lending platforms are not trustworthy hence you should verify their Income Tax numbers on government records.

CONCLUSION

Person to person or peer to peer money lending platforms are good for investment with Medium High level of risk and return of investment about 12 to 25% per annum. Measures should be taken before investing this and all the terms and condition should be read and understood and trustworthy platform should be chosen to minimise risk.

FACTS
1) The loans are normally unsecured and not protected by government and insurance companies so your investment maybe in danger if borrower dies.

2) ZOPA in 2005 first peer to peer lending company .

3) Since 2014 peer to peer lending industry is maintained by financial conduction authorities of country.

4) Paisa dukaan is first peer to peer lending company to get certificate of registration from Reserve Bank of India.

5) There are almost 30 p2p lending platform companies licensed by RBI in India.

So readers if you had not read previous blog on topic of investing money by lending it to someone without peer to peer companies then click here

  • I hope you liked amd understood this blog. Comment down or mail at dhirajpatel234@gmail.com if you have any query, suggestion or suggested blog topic.

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