The time has gone where most people rely on banks for their financial needs. In the past, people went to banks to borrow money, and banks in return charged them very high interest rates. The process of obtaining a loan was very cumbersome and time consuming.
A new type of lending and borrowing has come into introduction – which is named Peer-to-Peer Lending. It is also labeled as social lending, p2p lending, or person-to-person lending. In p2p, an individual can lend money to another individual or group of individuals to improve their financial condition – without involving any banking intermediary.
The evolution of the Internet has brought this lending onto the World Wide Web. The first example of peer to peer lending in the UK was seen in 2008. Since then, the industry has grown gradually and lots of companies and individuals are now involved. Now, borrowers can borrow money from an unknown person online and any individual who has enough savings can lend their money to anyone. This online process also has tools to perform credit checks of both the borrower and lender.
Banks have no role in this type of lending, but some lending companies are now out there who work as an intermediary, connecting borrowers and lenders. Another reason that is moving people towards this type of lending is low interest rates; Borrowers can lend money at a lower interest rate than bank loans. Lenders and lending companies can decide the rates. Borrowing a small amount of money is also an option with this type of lending, which isn’t always possible through bank loans due to the high interest rates charged.
As mentioned, lending companies have tools for credit checks. So, every borrower has to go through this test to prove eligibility. This credit check includes a basic inquiry about their credit score to find out if the applicant is capable of returning the money for which he has applied. Policies for lending and borrowing the money are different in every region. Therefore, a proper search is mandatory to find out the p2p policy that applies to you. For more information please visit to https://www.bassetgold.co.uk or feel free to call on 08002494555.