Peer To Peer Lending – Why it is one of the Best Ways to Raise Money?
Peer to peer lending, also referred to as P2P lending or person to person lending, is fast being seen as an ideal alternative to government loans and funding from traditional banks. This type of lending allows you to borrow money from P2P lenders. At one time, this concept was meant for financing micro loans for entrepreneurs to set up businesses in developing countries. With changing times, however, this type of loan is being commonly opted for by students trying to fund their higher education, housewives and small businessmen. Read on and find out how it proves to be one of the best ways to raise money.
Lack of high interest rates
Considering the fact that banks come with greater overhead expenses than P2P lenders, they charge a higher rate of interest. In case of P2P lending, banks are kept away entire from the entire process. This helps you to save a high amount of money in terms of interest, which makes it one of the best fund raising ideas.
Quick approval process
As compared to traditional sources of lending, such as credit unions or banks, which can take even a month for approving or rejecting your request for a loan, most of the P2P lenders make use of an application known as “automated decisioning” software which can almost immediately reject or accept the application for a loan. Once the application is met with approval, most of the P2P lenders take as little time as 5 days to process your request and release funds. This makes it one of the best fund raising ideas.
Fewer legal obligations
Many people find it difficult to satisfy the elaborate legal obligations which are set by banks, and the transactions also happen to be quite tiresome with these institutions. Peer to peer lending proves to be one of the best ways to raise money due to the fewer legal obligations that it comes with. The approval process is fast and the release of funds is quick enough, when applications are approved.
Easy qualifying
While approving the loan, neither the cash flow for your business nor your assets is considered. You can use the proceeds of the loan for any type of purpose associated to your venture. The P2P lending market is undergoing a huge growth. Some of the US firms engaged in this type of lending involve Virgin Money USA, Green Note Loans, Fynanz Loans, Lending Club and Prosper.com.
Keyword: peer to peer lending, ways to raise money, fund raising ideas
