Peer to Peer Lending – Should You Go For It?
You might have heard about the term “peer to peer lending” one of these days and wondered what it might be. This is simply one of the social ways to raise money which is going from strength to strength and more and more people are going for this type of funding instead of traditional banks and lending institutions which have elaborate and usually difficult approval processes, not to mention the strict terms and conditions. If you are looking for some effective fundraising ideas and wondering whether or not P2P lending can be your answer, read on and know.
How Does This System Work?
It actually involves getting money from online marketplaces such as Prosper.com that allow borrowers to get in touch with lenders. Peer to Peer lending is actually a form of social lending in which lenders and borrowers can agree on a loan without letting a third party dictate the terms and conditions of the loan. It is one of the coolest ideas for fundraising, without depending on traditional lending institutions. The loan request of a borrower is listed on the website and indicates the amount needed as loan, the loan duration and the interest rate preferred. Depending on their investment criteria, lenders go through hundreds of listings to place bids on the ones that suit their business as well as by determining the monthly expenses, monthly income and online profile of the borrowers. Where fundraising ideas go, this is one of the newest ones.
How Are Borrowers Assessed?
Like traditional lending organizations, such as banks, social lending places such as peer to peer lending sites have their own ways of judging whether or not a borrower is creditworthy. These websites assess them through their credit scores and a variety of other parameters, such as their affordability scores, stability scores, DTI ratio and more. Based on these parameters, these sites can lend as big amounts as 25,000 pounds for a span of 1 – 5 years. P2P is certainly one of the best ideas for fundraising.
Can You Apply for this Loan?
As long as you satisfy the minimum application criteria, you can apply. In most P2P lending websites, the registration process is fast and can easily be satisfied. If you can offer a realistic explanation of your need for the loan, your chosen way of paying back the loan and a few pointers about your reliability and stability as a borrower, you can have a higher chance of getting your loan funded. It is one of the best ways to raise money.
Keyword: peer to peer lending, fundraising ideas, ideas for fundraising, ways to raise money
