Peer to peer lending service as an online virtual market that puts together lenders (those with savings) and borrowers who are in need of funds (in the form of personal loans). This innovation is changing the way credit markets work.
If you want to understand the process of P2P lending in detail, you may go through https://crowdfunding-platforms.com/how-to-invest-in-crowdlending-p2p-lending.
By completely circumventing the banks, it enables faster lending and borrowing. Investors get customized results with better risk while borrowers get instant credit at low-interest rates. Because it is a platform where two parties interact, you can either sign up as a lender or borrower.
Borrowers looking for a personal loan apply online. P2P lending platforms utilize data and technology to assess the credit worthiness of the borrower. You will be assigned a risk category and the applicable interest rate after your credit check.
Credit-worthy borrowers get loans disbursed in the minimum possible time. If you register as an investor/lender your account will be opened with a lending platform.
You can begin to invest in consumer loans of a number as low as 15K. You have the leverage to choose a loan in which you want to invest. You can build your portfolio by choosing from a variety of loan risk categories.
Once the borrower starts paying the interest rate you will receive a refund in the form of EMIS (principal and interest). P2P lending deals inflation-beating back a few percentages higher than bank savings accounts or fixed deposits. You can either withdraw or reinvest to enjoy the benefits of compounding.