Although P2P lending is currently in its current form can still be traced back 2012 in India, it could have roots in all markets. Amazon has been doing this for over two decades. It brings together buyers and sellers of goods through its platform. Since the dawn of human civilizations, non-banking lenders have also brought together borrowers as well as capital providers. This is why P2P lending doesn’t seem new. Next-generation technology allows for a change in the structure and disbursement of loans.
Peer to peer lending (P2P), is an alternative to traditional banking. Peer to peer lending connects potential borrowers and online money lenders who are looking to make high returns.
Investors can currently reap high potential returns from P2P lending. Gross returns of between 15 and 35% are quite attractive in a world with low interest rates. Peer to peer lending will soon be able to compete with more well-known assets such as equity and mutual funds. Peer to Peer lending is already more appealing than the unpredictable stock market because it offers instant returns instead of the slow-paced asset that is mutual fund. Peer to peer lending has led to a drop in investment in gold, government bonds and real estate.
A person who wants to invest in P2P loans must first register as a lender through a P2P platform. A nominal fee is required to be identified as a lender. After that, a person can begin lending. The flexibility and freedom lenders have when lending on P2P loans is a key feature. P2P lenders have complete control over their investments and can lend to borrowers that they feel are suitable and trustworthy.
Everyday, online money lenders in India are growing. Online investing is becoming a popular choice for many people, even young ones. Investors who often struggle to understand or comprehend the equity markets will be particularly interested in this asset’s simple, yet effective basis. It remains to see if P2P lending platforms will offer the same returns as today in times of economic downturn. It’s a simple decision to become a lender through a P2P lending portal.