Tag: What is peer to peer lending?

peer to peer lending

Peer to Peer Lending – Easy Ideas and Complete Guide

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Peer to peer lending and fundraising have long been connected in a strong relationship. Peer to peer lending makes the whole phenomenon of fundraising something quite easy and fun filled.  Easy fundraising ideas and garnering funds to support a cause easily for sure attract peer to peer lending investors from far and wide. But before a fundraiser ventures into this lending model for investment, he should be well aware of the rules governing such an investment and fundraising scheme. We present in some details some key things to look into before moving forward with peer to peer lending.

Things to keep in mind in peer to peer lending model

Few things hold the key in any investment model for starters. With an age full of peer to peer lending investors on the lookout for interesting, innovative and creative fundraising ideas; efforts should be made consciously on behalf of the fundraisers to live up to the expectations being sought for. But choosing the right option while selecting amongst many investors of the peer to peer lending model, one as to patiently weigh down the pros and cons and make the correct selection considering he following key aspects.

  1. Eligibility criteria: The first and foremost consideration for a fundraiser to select the best peer to peer lending investor is to look into the fact that what amount of funds an investor is ready to put into a fundraising project. The greater this amount, the better for a fundraiser. This lending model based funding from an investor is certainly the chief aspect to consider before selection of an investor for fundraising for a cause.
  2. Procedure: Well we all prefer easier procedure for investment. Fundraisers should also prefer such an investors in the peer to peer lending model for an investment. Easier procedure for an investment is most preferred for hassle free and effort free fundraising.
  3. Penalties: A lot of investors in the peer to peer lending model for fundraising attach the column of a penalty before investment. A smart fundraiser should be aware of all these and choose such an investor who has the lowest value of penalty attached. This can be of much help in the long run and for the interest of the funds being collected.
  4. Support: A good support from the investors in a peer to peer lending model for fundraising is another aspect to consider before selecting an investor in this model. An investor who also provides due support to make a fundraising event a greater success should always be preferred. Any fundraiser looking for an investor should also consider the support aspect into greater consideration.
peer to peer lending

Ways to raise money via peer to peer lending

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Peer to peer lending is a unique technique to raise money and collect funds. Peer to peer lending involves people who are in need for money and those who are willing to lend. Peer to peer lending is a simple yet efficient technique to raise money. In peer to peer lending, a common rate of interest is fixed and both lender and borrower are mutually conscious of the same. Peer to peer lending is again unique in this feature as both the parties mutually consent upon the interest rate and unlike traditional ways of money lending where a pre-decided or forced rate of interest is enforced upon the lender. Peer to peer lending also provides another unique and interesting dimension, where in online peer lending platforms the present borrowers and lenders can settle lending and the issues associated online, enjoying the comforts of their homes.

But a fund raiser often gets anxious with questions about peer to peer lending. The person more often gets stuck between many things emerging in his mind which can successfully be presented on a peer to peer lending platform, to garner funds for the cause for which the funds are sought for. We present below certain ways that can easily draw attention of lenders in a peer lending environment.

Ways to attract peer to peer lending prospects

  1. Knowledge: Knowledge of the borrower is over necessary and is of prime importance when it comes to peer lending. A fund seeker must be through with the profile of his borrower. Lending sites are a good medium for such profile or background checking. A borrower should go through minutes of the borrower’s profile and get a braised of the needs and interests which a borrower is looking for.
  2. Self-profile: The profile of a borrower needs to be quite lucrative for getting looked at by lenders in a peer to peer lending model. He who is looking to collect funds should not have a bad track record with previous loans and their repayments made. Nowadays a CIBIL score maintained for an individual keeps track of all past loan history of a person. This score of the borrower should be high.
  3. Agreement: The terms and conditions of the loan agreement should be clear to the borrower as well as the lender. Any breach of contract terms is intolerable and results in decreased trust on the part of both the parties to continue relationships.

Well these few points should be clear on the art of the fund raiser before stepping into peer to peer lending for fund raising.