Nowadays the developing of peer to peer lending industry really amazes! The first peer to peer companies started to appear in 2005 and even now they save the same incredible tempo for years. That’s not strange as p2p lending investing is one of best-known methods of online financial investments.
More than 25 various firms from all around the world are now on the market of peer to peer lendingand in future mayeven replace the banks. Some of these companies specialize only in personal loans, some of them – only in business loans. But the largest companies like https://grupeer.com will provide you with a loan for any purpose you want.
In contrast to traditional institutions, peer to peer lending doesn’t have high interest rates or any penalties for those borrowers who take a loan for some riskycauses, for example, for debt consolidation or paying off the medical expenses. It also gives a higher passive income.
So, why has p2p lending become so popular among the people? Maybe, the reason is in the really nice advantages of using it. So, we’ve prepared the list of pluses for you to see and decide, whether you want to invest in business loansof peer to peer lending or not.
Four advantages for borrowers
The advantages for borrowers in p2p lending include the speed and the simplicity of getting money, profitable interest rates and funding rates which are higher than in the banks.
- Simple process of application
The access to the Internet and a little time – everything you need to apply. Give the website some required personal information and in a few minutes you can be approved. It also won’t take you long to get your loan funded.
- Speed of Funding
The speed of funding a loan is the advantage as well. As a rule, the time depends on the amount of cash you want to borrow. For large amounts of money it may take from 1 to 3 weeks to get a loan and some small loans can be funded just in days.
- Rates of interest
One more benefit is peer to peer lending interest rates which are quite profitable for borrowers. Peer to peerlending sites offer different interest rates, but usually such rates don’t exceed 7% a year. On such websites borrowers are suggested different terms to pay the loan out: they may vary from one to five years. And the interest rates are closely connected with such terms, so they can be reduced.
- Higher Funding Rates
And the last advantage for borrowers in online peer to peer lending is that over time amounts of money which can be given to a borrower have increased. Now, they range from one to thirty-five thousand dollars. It means that the loan can be used for more purposes.
Three advantages for lenders
Advantages for investors are higher returns, a possibility of diversify and choose borrowers.
- Profitable Returns
Peer to peer lending can offer the lenders making theinvesting into the loans. In general, the returns from such investments can reach 10% a year. Among today’s suggested opportunities 10% is a really good proposition.
Besides peer to peer lending investing pluses, in p2p lending investors can diversify their money into different loans. That’s usually used to reduce the possible risks.
- The lenders’ choice
Lender can invest in small business or personal loans. Also, it’s not a secret that on peer to peer lending websites there are a lot of borrowers who have different credit histories, different levels of salary etc. As lenders can easily browse borrowers’ profiles and see their information, they decide themselves, whether to give money to a certain person or not. Thus, investors choose those who match their preferences.
Peer to peer lending Europeis a way of investing and borrowing money that has proved that there are a lot of pluses of using it both for lenders and borrowers. Maybe because of such plusesp2p lending investinghas received the popularity. By the way, it gave loans to more than 60 thousand of people for the time they are on the market.