Peer to Peer Lending Scheme
The scheme offered by Peer to Peer lending briefly is to bring together lenders with online loan seekers.
Also in this model, lenders can find out in more detail and depth about prospective borrowers.
P2P lending companies provide borrower profiles to potential lenders so they can choose which one to take. After being deemed suitable, the borrower can immediately get the money he needs.
In lending websites, prospective lenders can choose borrowers with good quality. Because the lending company has analyzed the prospective borrowers to carry out the selection process.
Of course this will make investors feel more comfortable and not worried about lending money.
In addition to sorting prospective borrowers before they can start applying for loans, P2P lending companies also apply this system to lenders, so that the credibility of loan seekers and investors is guaranteed.
Bank Loan Scheme
For people who want to borrow money from a bank, the first step that needs to be done is to sort out loan products.
Then, what things should be considered when sorting out loan products? Among these are interest rates, requirements, and others.
The prospective borrower must then submit information about himself and his business. Planning for the use of money and letters or proof of ownership of assets must also be prepared before borrowing money from the bank.
In addition, prospective borrowers must also be able to ensure that the business carried out has good prospects, including updating financial statements at least every two years, as well as providing estimates of cash flow .
The next step is filling out a form, there are now based forms online though most have to meet bankers in particular.
After that, the prospective borrower is just waiting for a response from the bank which generally takes up to 3 months.
After the loan is approved, the borrower must wait for the disbursement of funds.
Comparison of Borrowing Money Peer to Peer Lending vs. Bank Loans
There are several differences between borrowing money at a bank and through a P2P lending platform . What are the differences? Before entering into the discussion, as an entrepreneur, have you separated personal and business finance?
Separating the two financial flows is very important, so that your business can develop smoothly.
1 Borrower and Loan Provider
Borrowers in banks and lending are the same, namely those who need money.
While the lender is somewhat different. The money in the bank comes from customer savings that are channeled for credit. While lenders in P2P lending are investors who deliberately pour their money into this platform to make a profit.
2 The Duration of the Process Lasts
The process needed between people who want to borrow money through lending and banks will certainly be different.
People who choose to borrow money in a bank must wait for approval for 3 months after completing the form.
Once approved, prospective borrowers need to wait up to 14 working days to withdraw the money. The time for disbursing this money may be long enough for those who need money immediately.
Whereas people who borrow money via lending do not need a long time.
The length of the process of starting the application until the disbursement of funds usually takes around 12 working days.
Short time and easy requirements are suitable for candidates who need fast funds.
3 Supporting Documents
There are many documents needed to take care of lending money in banks and lending.
The documents needed are those related to personal data, asset ownership, business financial conditions, and how the prospects.
If the document is complete, of course the loan will be received and immediately disbursed.
4 Parties Involved
For people who want to borrow from a bank, only the bank is involved in deciding whether or not they meet the criteria.
While in lending , there are 2 parties involved in deciding loans, lending companies and investors.
The company selects credible borrowers, while the investor has the right to choose prospective loan recipients that are suitable for him.
5 Risks and Guarantees
For borrowers who use bank facilities, there are collateral or collateral.
While in the P2P lending scheme there is no guarantee, but there are written rules to agree if the settlement is not complete and so on.
Determine the place to borrow money wisely
Before deciding where to borrow money, you must know your needs and abilities.
Do you need money fast? Or do you need a low-interest loan?
You need to pay attention to the interest rate and monthly installments that must be paid off.
Don’t just look at the size of the loan that can be obtained, but considering your ability to pay is also very necessary.
Among the 2 choices above, which one would you choose? Determine your answer while sharing the important information above with fellow businesspeople who know very well the ups and downs of managing a business, thank you!