Peer to peer loans, also known as P2P loan, is a type of loan that is invested by individuals who have money to fund your loans. Peer to peer loan is better than bank loan because the individual lenders are less stricter than the bank. The bank put emphasis on your credit history and credit score before deciding the interest rate. The interest rate charged by the bank is higher than the interest rate offered by P2P loan. There are lots of criteria and terms and conditions you need to meet in order to be qualified for a traditional personal loan.
The bank may ask you to provide a variety of documents like personal asset statement and an outline of your personal budget. If you are applying for a business loan, they will ask you to provide a business plan and cash flow forecast of your business. The bank wants you to provide proof that you can afford to pay back the loan amount that you request.
Normally, it takes at least 3 months to wait for a decision from a bank on whether they decide to extend the loan to you. Sometimes, the bank can take up to 6 months because they have to evaluate the value of your assets. If your loan get approved, it will take a few working days for you to receive the funds.
It is easier to get a peer to peer loan because it involves lesser paperwork. The peer to peer loan will take into account other factors beside the credit score when determining your interest rate. Less emphasis is placed on the credit score in peer to peer loan. You don’t have to put in any collateral to get approved for the peer to peer loan.
When applying for a P2P loan, you must provide proof of your business finance for the last 2 years. When you have gathered the required documents, you must submit the application for the p2p loan online. It only take a few minutes to submit the application and most people get a response in as little as 2 days. If you get a positive response, your loan will get listed in the marketplace.
Any individual investor that is interested in funding your loan will put forward the offer that contains the interest rate he is willing to lend. When the loan is funded, you must work on paying back the loan every month. Most P2P loans get funded within a period of 1 – 2 weeks. You will receive the funds for the approved P2P loans in a few working days. Some p2p loan companies will wire the approved loan to you in as fast as the same working day.