The first door that every borrower knocks to avail loans is that of a bank. However, at most times, the borrowers return empty-handed. Perhaps, the interest rate is too high, the process is too cumbersome or the bank rejects the application. The next option would be to approach family and friends who may not be able or interested to give the loan. The personal loan lenders operating on a standalone basis may also charge a very high interest. Imagine, going through so many hassles, especially when you are looking for a short-term or unsecured loan! But, have you tried exploring the digital loans? Digital loans are offered online by peer to peer lending companies in India.
Peer to peer lending companies such as LendDenClub connect people who want to borrow money online to those who want to lend money online. There are several reasons why digital loans are becoming popular among the borrowers.
A large pool of personal loan lenders
There are hundreds of lenders who are willing to lend money online and are registered on P2P lending platforms. So, the chances of non-availability of the loan are almost minimal. A good P2P lending platform even guarantees the funding of loans. As long as your profile is credit worthy, you can borrow loans from multiple lenders at the same time.
Faster approval time
Your loan request is processed very quickly, in fact, in less than 24 hours or even in minutes, subject to the P2P lending platform you have chosen. So, for all those short-term or emergency situations when you need a loan the most, digital loans are your saviour.
Easy verification process
How many times your loan application has been delayed due to the tedious loan approval process in the banks? But, the verification process on the peer to peer lending platforms is absolutely hassle-free and flexible. As soon as you register online and submit the required KYC documents, your credentials are verified within no time. You don’t need to waste your time and money in visiting offices or meeting the verifiers. Once your profile is verified, you are instantly eligible to start borrowing the loans.
The interest rate is based on your profile
Unlike banks or other financial institutions, where the interest rate is fixed, the interest rate on the digital loans is usually curated for the borrower based on the internal credit rating of the P2P lending platform. So, more credential your profile is, the better your credit score is and lesser interest rate you have to pay.
There are no hidden charges or overheads in digital loans. There is a nominal registration fee.
Peer to peer lending is indeed making the availability of digital loans easy and cheaper for the borrowers.