IndiaP2P Blog

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Why P2P is Better Than Traditional Banks And How You Can Take Advantage

Mar-01-2023


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Why p2p Lending is Better than Bank Loans

​In the current financial system, banks are the primary source of lending and borrowing. But, with the emergence of new technologies, a new type of lending has emerged - peer-to-peer (P2P) lending.

P2P lending is a type of lending that happens between two individuals, without the involvement of a financial institution. In India, P2P lending platforms connect borrowers and investors, and facilitate the loan process.

There are several advantages of P2P loans over traditional bank loans. Here are some of them:

  • 1. Lower Interest Rates: P2P loans usually have lower interest rates than bank loans. This is because there is no middleman involved in the process, and hence the costs are lower.
  • 2. Greater Flexibility: P2P loans offer greater flexibility than bank loans. For instance, you can choose the tenure of the loan, the repayment schedule, etc. This flexibility is not available with bank loans.
  • 3. Quicker Disbursal: P2P loans are disbursed much quicker than bank loans. This is because the entire process is online, and there is no need for documentation or other formalities.
  • 4. Easier Eligibility: The eligibility criteria for P2P loans is usually much easier than that for bank loans. This is because there is no credit score required for P2P loans.
  • 5. No Prepayment Charges: Most P2P lenders do not charge any prepayment charges. This means that you can repay your loan early without having to pay any additional fees.

Discover the Benefits of IndiaP2P

​In a rapidly developing economy like India, it is becoming increasingly difficult to get good returns on traditional investment options like FDs and RDs. However, IndiaP2P offers a unique and innovative solution that allows investors to get better returns on their investment.

IndiaP2P is a peer-to-peer lending platform that connects investors with borrowers in need of short-term loans. Borrowers are typically small businesses or individuals with a good credit history but in need of quick access to capital.

The interest rates on IndiaP2P are higher than traditional investment options, but the platform offers a number of benefits that make it a more attractive option for savvy investors.

Some of the benefits of IndiaP2P include:

-quick and easy access to capital

-competitive interest rates

-flexible repayment terms

-transparency and security

-diversification of investment portfolio

Investing in IndiaP2P is a great way to get better returns on your investment and diversify your portfolio. If you are looking for an innovative and different way to invest your money, IndiaP2P is the right platform for you.

What is the best way to invest money in India?

The best way to invest money in India will again depend on your individual circumstances and goals. If you're looking for a safe investment with fixed returns, savings accounts and bonds are a good option. But if you're willing to take on more risk in exchange for the potential for higher returns, P2P lending platforms are a great option to consider.

P2P lending platforms offer interest rates that are much higher than traditional investments like savings accounts and bonds. And, if you choose a platform with high-quality borrowers,like in IndiaP2P considers the data provided by credit bureaus and alternate data collected directly to arrive at a combined credit rating graded across 6 categories A to F, So your investment will be less risky than if you choose a platform with lower-quality borrowers.

 

The Security of Funds When Investing Through IndiaP2P

​When it comes to online lending, one of the first questions borrowers ask is whether their funds are safe. IndiaP2P is a leading online lending platform in India, and we take the security of our borrowers' funds very seriously. Here's a look at how we keep your money safe when you invest through IndiaP2P.

All borrowers on IndiaP2P are verified and screened through a stringent process before they are allowed to list their loan on our platform. We also require all borrowers to provide collateral for their loans, which serves as an additional layer of protection for investors.

In the event that a borrower defaults on their loan, IndiaP2P will work with the borrower to recover the outstanding amount. If we are unable to recover the full amount, investors will be compensated from the borrower's collateral.

Investors' funds are also protected by the fact that they are spread across a large number of loans, meaning that even if a few loans default, the overall impact on investors' portfolios will be minimal.

So, if you're looking for a safe and secure way to invest your money, IndiaP2P is a great option. With our borrower verification process, collateral requirements and commitment to recovering defaulted loans, you can rest assured that your money is in good hands.

Comparison of Bank Loans and P2P Loans

Category

Bank Loans

P2P Loans

Source of Funds

Traditional financial institutions

Individual investors

Loan Terms

Longer repayment periods

Shorter repayment terms

Interest Rates

Lower interest rates

Higher interest rates (depending on platforms)

Eligibility Requirements

Stricter eligibility requirements

More flexible eligibility requirements

Application and Approval Process

Complex application process, longer processing time

Simple application process, quicker approval times

Loan Amounts

Larger loan amounts

Smaller loan amounts

Keep in mind that this table provides a general overview and there may be some variation between different banks and P2P platforms. Additionally, borrowers should consider other factors such as fees and penalties when comparing loan options.

The Process of Investing Through IndiaP2P

With IndiaP2P you can choose between two investment plans - income and growth.

If you are looking for recurring monthly income, then choose the monthly income plan where interest earned on the loans you fund accrues to your escrow wallet and can be withdrawn and used. For those looking to compound their wealth, choose the growth plan where interest earned is also invested back into new loans to increase your investment base and returns.

Risk categories indicate the risk bands i.e. IndiaP2P credit rating to which the loans you fund would belong. While all our borrowers are vetted and verified, there is always a risk of default/non-repayment. The risk categories indicate this risk of default.

Conclusion

P2P lending is an innovative financial system that is quickly becoming the go-to choice for many borrowers in India. This article has outlined the advantages of P2P lending over conventional bank loans, such as quicker processing times and competitive interest rates. For those looking to obtain a loan, P2P lending through platforms like IndiaP2P etc, can prove to be an ideal solution without any delays or hassles. So, if you're looking for an easy way to get access to funding, then IndiaP2P  could be just what you need!

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