The P2P loan is known as a person-to-person loan, and is a new financial tool that is increasingly being used. It is aimed primarily at two types of customers: those who need a loan and those who seek to invest to get savings.
It is a type of alternative financing, within the different types of online loans that exist and, like these, is carried out through a platform that serves as a union between those who need financing and those who offer it.
People interested in lending their money, prefer to make through this system because they are investing in debt of natural persons and, subsequently, will receive an interest in it.
Normally they are not very high amounts and its main characteristic is that there is no intervention of a financial institution between both people. Currently they are used so much because it is usually a more comfortable and cheaper system than asking for a loan from the bank.
We can also find it with the name of crowdlending ( crowd = crowd, lending = lending) since it is considered as one of its modalities, or social lending.
P2P loan characteristics
P2P loans represent an alternative source of financing to make money easier, without complications. But it is also very attractive for investors, who see in it the way to achieve greater profitability than offered by banks.
These are the characteristics they present, for those who want to apply for a P2P loan:
- Interest: P2P loans usually carry an interest of between 5% and 15%, which means that it can cost less than requesting a loan from a traditional credit institution.
- Amount: As we said, large amounts are not handled and credits usually range from USD 600 to USD 100,000.
- Term: the money may be returned within a considerable period, depending on the type of platform. This is important to consult because it varies from one to another.
- Answer: when the funding applicant asks for money, the response to your request will be very quick, whether the credit can be viable or not. If yes, the entire process of obtaining cash is usually very fast in the same way.
How to apply for a P2P loan?
If we want to apply for one of these loans, the first thing we must think about is that we have to resort to a P2P loan platform, without complicating it, online.
Once in it, you will only have to fill out a form with all your data and details of your situation and / or project that you want to finance.
The platform will analyze your request and assign you a level of risk based on different characteristics that each platform takes into account. In addition, depending on this, an interest rate will apply.
When your application has been accepted, you will go directly to the investors, who will decide whether or not to finance your project.
There are three simple steps that usually do not last more than two weeks.
There are many advantages that we can in loans between individuals, but among them the most important are:
- The return that the investing party obtains is above average.
- It allows lenders to diversify their risk. That is, the level of volatility in this system is usually lower than in other types of investments.