Are you running low on cash and probably looking for a way to get hold of funds to start up or boost up your business? Then why not try peer to peer lending, a platform that needs not to know you before they offer you what you request for?
In peer to peer lending, there are things you need to know that will help you to know where to apply and how to apply. All thanks to Peer to peer lending, borrowers with low or poor credit scores are given a chance too, so just read on to know more.
Peer to Peer Lending
This is a form of lending direct money to individuals or businesses without any intermediate. Peer to peer lending help to raise loans for those who need to borrow from those who want to invest based on a crowdfunding model.
Peer to peer lending is a modern credit model created to meet the current business credit demands. Peer to peer lending uses an online platform where the borrowers and lenders can register themselves following due protocol before allowing any lending and borrowing to take place.
Say peer to peer lending process begins when you sign up to the platform and then invest the amount you wish to lend. And then you push further by making lending offers to borrowers who wish to lend from the platform after following the due process.
Peer to Peer Lending Advantages and Disadvantages
One of the biggest advantages of Peer to peer lending is the Interest Rate offer you get as the lender. The variety of reasons for which the money are given out matters, as the investors are having a wide range of choice when it’s time to lend out their money.
Another added advantage of Peer to peer is its Diversification, meaning they don’t focus their money on just a single product. That way they have little worry about any inevitable loss, as other source can still be used to run the business forward.
Peer to peer lending serves as a Secondary Market that lenders can use to sell their parts to the public. Peer to peer does give room for investors to make use of an annual tax-free allowance to invest in Peer to peer lending and earn tax-free interest which is an added advantage.
A disadvantage to peer to peer is the risk you are exposing your capital to, as there is no involvement of financial service compensation bodies. Although they make sure to avoid such from happening there are some things you can’t really avoid.
Another disadvantage of peer to peer lending is the Tax Responsibilities involved that a lender will have to bear. There is also platform variation with a Peer to peer lending and each does have its pattern of governing different from another.
Top Peer to Peer Lending Platforms in UK
Peer to Peer Lending Platforms is becoming the new way of borrowing and lending money. They have a lot of benefits for borrowers and lenders.
Below is an overview of the top best peer-to-peer lending platforms in the UK for you to go through which are as follows:
This platform is having an APR Range of 7.95% – 35.99, the Loan is received within a single day and the Loan Amount range is between $2,000 – $40,000. Tanks to Prosper, borrowers with poor credit scores can borrow and also creates room for a joint application for a loan.
2. MyConstant
MyConstant as a P2P loan platform is having an APR Range of 6.00% – 7.00 with a Loan Amount Ranging between $50 – $50,000. It is said to be the best Peer to peer crypto loan where borrowers make use of their crypto to secure loans as their collateral.
- Funding Circle
The Funding Circle loan platform is known to have an APR Ranging between 10.97% – 24.31% and a Loan Amount between $25,000 – $500,000. Small-scale businesses can lend from this platform as their request will be granted within the next 48 hours.
Also Read:6 Top Lenders Net in Africa 2022
Peer to Peer Lending Requirements
For an individual or an organization to start up a Peer to peer lending forum, they need to meet up with certain criteria. So let’s take a look at some of the peer-to-peer lending requirements needed before setting up a Peer to peer lending organization.
The Peer to Peer Lending Requirements is many and varied. Here are the few things a Peer to peer lending requires before setting up the business idea into play:
- Incorporation
- Have an Insurance policy
- Own a Business license.
- Own or Rent a facility for at least a year.
- An office equipped with computers, phones, printers, and furniture.
- Own a website or a Loan app.
- Own software.
- Marketing budget.
- Have Business Cards of their own.
Above are a few of some pointed out requirements you need to get a hold of before opening a peer-to-peer lending forum. These are factors that ensure your Peer to peer lending forum works smoothly and also meets the demands of your borrowers.
Conclusion
Peer to Peer Lending is a new and emerging industry that has seen significant growth in the past few years. It has been termed “the future of finance” because it offers a new way of lending money.
With the current economy on board, not everyone has what it takes to start up and secure a steady source of income. Unlike local banks, the peer to peer lending is meant purpose to help individuals get back on their feet, providing them with the funds they need in return for a little interest.
Peer to Peer Lending has covered the entire world as it is and has been of great relevance in boosting today’s economy. All that you need to know about Peer to peer lending is here in this article, let me know in the comment box below if there is anything I skipped to mention.