Peer-to- peer lending is an upcoming asset class for investors looking to get a high-interest rate on their funds by lending money and is a blessing for borrowers looking to avail short-term loans with ease. The process to borrow money online is easy and hassle free one.
Here is a guide of the steps to be followed:
1. Registration
An individual looking to borrow money online for a short time period can do so by
registering on a peer-to- peer lending company platform as a borrower. They have to enter their personal, professional and financial credentials to help the agency access their profile. Nominal fees might be charged a part of which can be returned incase of the loan not being sanctioned due to extreme reasons.
2. Loan Requirements
A borrower needs to enter their loan requirements i.e loan amount and tenure and the rate of interest will be determined based on the credit profile of the borrower. Therefore the higher the credit score of the borrower, the lower will be the interest rate on their borrowing.
3. Tracking the funding status
Once a borrower has been listed on the peer-to- peer lending company’s platform, they can check the status of their loan sanction and will also be notified via email.
4. Documentation
An advantage of P2P loans is that funds are sanctioned and then the complete documentation is done. The documents are then franked and the agreement and the Post dated cheque are submitted. This is unlike the banks wherein all the documents are collected well in advance and in spite of that the loan may not be sanctioned. With P2P lending, a large part of the tedious process is made simple.
5. Disbursement
After the agreement is signed, the promised amount is disbursed to the borrower from the lender’s account and a softcopy of the agreement is sent out to both.
This summarizes the process that takes place whilst borrowing money from a Peer-to- peer lending company in India. It is a simple, hassle-free and quick process. It connects borrowers looking for short term loans to registered personal moneylenders seamlessly.
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