In our previous post, we talked about how PeerPower connects the borrowers and investors and becomes their additional channels apart from traditional banks. In this and the next post, we will talk about how this new alternative provide benefits to the users.
Benefits for P2P Lending borrowers
1. Convenient – Application process is online and simpler than ever. Borrowers can check their personalized rates within a few minutes anywhere and anytime. During the loan funding, borrowers can also track their funding progress about how much of their loans have been funded by the investors on a real time basis.
2. Competitive Interest Rates – Most credit worthy borrowers will obtain better rates(8-15%) than through traditional channels(20-28%).
3. Declining Balance Installments allows borrowers to pay back their loans in monthly principal and interest payments, resulting in lower total interest burden.
4. Longer loan terms – PeerPower loans provide loan terms of up to 4 years, allowing the borrowers to pay lower monthly payments over a longer period of time.
5. Transparent Fees – Fees at PeerPower are 100% transparent and fully disclosed on our website. Borrowers will not be charged with any fees until their loans have been originated or fully funded.
How does P2P Lending platform work for the Borrowers?
Create Account & Document Verification
First, borrowers check their interest rates through the no obligation loan application process. The documents submitted to the platform will be similar to the traditional process of applying for personal loans or credit cards and include things like a copy of ID card and pay slip or proof of income.
The platform then verifies the borrower’s documents, and also their credit history with the National Credit Bureau. Then, online loan applications will be created for the successful applicants.
A successful loan application will be listed on the marketplace and the investor’s loan browsing page. The investors will see the borrower’s profile and credit history to help them make their investment decisions. At PeerPower, loan applications will be listed for two weeks or until investors have fully invested in the loans.
Contract Signing & Funds Disbursement
Once the loan is fully funded and the final loan terms are accepted, the borrower will need to sign a loan contract and submit any final documents. Within two days after the contract is signed and verified, the money (loan amount) will be disbursed into the borrower’s bank account.
On the scheduled due date, the borrower has a duty to make monthly repayments. PeerPower then fractionalizes this amount to repay the investors who funded that particular loan. We also report the payment behavior of every borrower to the National Credit Bureau, so maintaining good payment history will help improve your credit.
We will write about Investing in P2P Lending and its benefits. Please stay tuned and make sure you subscribe to our newsletter!