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Home » Business and Management » About Peer to Peer Lending Introduction

About Peer to Peer Lending Introduction

Peer-to-peer lending or P2P financing as "the practice of lending money to unrelated people or" peers, "without going through a classic fiscal intermediary, such as a bank or other conventional financial institution." As the definition indicates, it is an alternative type of financing in which people contribute to individuals. If you want best peer to peer lending companies visit .

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For a creditor, P2P loans are a quasi-fixed investment instrument in the sense that it offers a predetermined rate of return (a creditor negotiates with the loan applicant), but which is considerably higher than a fixed deposit, but a danger that is greater than a Bank FD or a deposited surety.

Before the advent of those P2P platforms, people took short-term interest-free loans from people who understood them directly or indirectly. This situation had its limits both for loan applicants in a type of social stigma, demanding a favor, short-term durations, etc., as well as for creditors in the form of absence of legal order, absence of returns, etc.

Some of these value-added functions that P2P platforms work on, in addition to bringing together lenders and loan applicants, are expected to be diligent on borrowers, facilitating legal agreements and obligations. In addition, they indicate various ways in which operations can be structured.

They are far ahead of standard lenders in exploiting the technology, and as such many revolutionary risk assessment methods, such as social media research, are discovering their applicability on those platforms.