P-2-P LOAN: BENEFITS AND DISADVANTAGES FOR INVESTORS !

  • What is peer -to - peer lending ? 
  • The advantages and disadvantages of becoming has some disadvantages : 
  • Becoming a P2P investor 
  • But the second for those who take loan : Those who have already been told well : 
  • Advantages for those who take loan : Those who have already been told well 
  • Benefits for those who take loan
    • WHAT IS PEER-TO-PEER LENDING ?
Since its inception, peer-to-peer lending or P2P borrowing has created a stir between borrowers due to easy and fast loan facility. It is also known as social credit, this method allows people to borrow money without the involvement of any bank or financial organisation.


As the name implies, this flexible method of loan financing from the person who removes the requirement of any physical banking establishment and makes the borrowing process very easy.

 This crowd funding method made loan acceptance possible for those borrowers who are otherwise unable to take advantage of it through traditional financial institutions.

Whenever you think about taking a loan or a credit, the first word usually comes to your mind is a bank.

But, peer-to-peer is a new concept that has made significant changes in this assumption of borrowers. Peer-to-peer online platform works as an alternative to all those individuals who want to get instant personal loan without complex documentation process.

Many P-2-P loans are unsecured personal loans, although some large amount businesses are lent. Secured loans Sometimes precious assets like jewelery, watches, old cars, fine arts, buildings, aircraft and other commercial properties are presented in mortgages.

PEER-TO-PEER LENDING FEATURES

Special features that make the peer-to-peer lending system stand out from the hoaxes of other informal lending options:

- The system of P2P loan system raises the loan for those individuals who do not have access to traditional banking system from those who want to invest their money.

- The main principle of this system is to provide benefits to the borrowers as well as the investors. While it allows people to borrow money in low interest rates, it enables the savers to get good interest on their saved amount.

- For this reason any common citizen who has more money than he can, can become an investor through this medium, or if he needs money, then he can get a loan from here.

- The entire process is conducted through online platform where both the lender and the borrower register themselves and directly connect with each other. Members are allowed to participate in the transaction only after making proper assessment.

- The platform giving each peer-to-peer lending is considered as a non-banking financial organisation controlled by the Reserve Bank of India.

P- 2- P THE ADVANTAGES AND DISADVANTAGES OF BECOMING A INVESTOR


P-2-P LOAN: BENEFITS AND DISADVANTAGES FOR INVESTORS !
P-2-P LOAN: BENEFITS AND DISADVANTAGES FOR INVESTORS !
In the first P-2-P lone medium, investors know the advantages of providing a loan:
  1. Higher Return -                                                                                                                            The average net return for most lenders on the platform (after loss reduction) falls in the attractive category from 15% to 20% pa. When compared to the average returns given by other market linked investments such as real estate, MF and stock market, these returns are excessive.                                                                                                                                               
  2. Easy Tenure -                                                                                                                                                                                                                                                                                               In the peer-to-peer lending world, both the borrower and the lender can choose from the set of easy tenures according to their purpose. For example, the loan period can vary from 6 months to 36 months.                                                                                                                            
  3. Regular and stable income -                                                                                                     Investors can earn month-by-month returns as principal repayments and interest (EMI). This is the biggest benefit of P-2-P loan investment on other investment related to the market, as many other investment products have lock-in period (up to 3 years).                                                           
  4. Advantages of Compound Return -                                                                                         Lenders start earning returns every month, which can be invested again to generate compounding or compound returns.

BUT THE SECOND AND THIS INVESTMENT HAS SOME DISADVANTAGES:

  1. It is highly risky :                                                                                                                             the risks of defaults are very high, it means that the borrower can not pay interest or worse, the debt can not be repaid. This is called credit risk, that is, not only to return the original amount but also not to get interest.                                                                                                                                                                                                   
  2. Income Tax :                                                                                                                                 Your income from P-2-P platforms will be considered 'income from other sources'. This will be taxed according to your tax slab, which means that you may have to pay a higher tax than other investments.

ADVANTAGES FOR THOSE WHO TAKE LOAN: THOSE WHO HAVE ALREADY BEEN TOLD WELL:

  1. Easy and fast loan process
  2. There is no need to pledge any property due to a personal loan
  3. It is very risky to take a loan from the unorganised sector and here you are protected from the creditor's pressure.
  4. Loan facility even if there is no good credit score

BENEFITS FOR THOSE WHO TAKE LOAN:

  1. Interest Rate: There may be a high interest rate here if there is no good credit score.
  2. This is usually not available in large amounts.

As we often tell, the reader first understands what the P-2-P loan is and how the conditions are applicable in it. 

 For awareness, we show that this facility is fast and easy due to being completely online but there are many times hidden charges and other charges that can prove to be the only disadvantage for both small investors and borrowers. May be.

thanks for the time .

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