Investment is something most of us know about. While the majority of the population rely on the bank for either taking loans or indulging into investment, a new term is seen buzzing across the globe. Fintech Apps or Peer to peer lending is what we will debate about in this article.
Currently, in it’s growing phase, P2P lending or crowdfunding has exposed a whole new set of investment opportunity for all the stakeholders. P2P lending is trending and the next-gen investors are now seen shifting from the traditional means of business to the explicable P2P lending apps for providing loans. No doubt, cutting banks and inducing a new platform voices innovation. But, how would this turn up in near future would be worth enticing?
Given the growth of market trends and high paced investment in the field of Fintech Innovation, it is imperative to keep an on what this industry has in store and how would the same help redefine the industrial world.
Before we move on to the specs of Fintech apps and the future prospects of Peer to peer lending market, let’s have a look at what do we mean when we say the term p2p lending.
P2P Lending – Unboxing Opportunities
While you must undoubtedly have an idea about what lending notifies, P2P lending or peer to peer lending is a deal made between two interested parties. One being the borrower and the other an investor. A borrower is expected to register himself on the peer to peer lending app, verify it’s credentialing and then put a loan request stating in details the reasons why an investor should consider him.
Investors, on the other hand, scroll down all the loan listing and stop by the one that pleases them the most. While the loan amount varies from person to person and depending on the reason behind seeking a loan. Personal loans range between £500-£35,000 where’s loan expected for setting up startups are dramatically higher.
Future of Fintech is a mirror view of all you see. For some, it might act in favor whereas for others it could unexpectedly turn cards. Flipping is no new in the domain of Fintech or peers to peer lending. Where a borrower could be on the winning side, an investor might suffer loss owing to payment denial by the corresponding buyer. Guessing at this stage would be wrong. Fintech is innovating and there like a plethora of opportunities for all the start-up geeks to vent in peer to peer lending startups.
Odds that Favour Fintech Innovation
While the future prospects of peer to peer lending is multifaceted, yet there is a plentitude of benefits that please a business enthusiast to try their hands and play the game of lending & borrowing.
- Greater Returns
For long, most of us have always looked up to banks we platform of providing loans. But, the rates of interest are undeniably high. When it comes to P2P lending both the borrower and the investor drives benefit. The borrower, on one hand, has to pay a less interest rate, investors could charge more than what they are paid by bank investment.
- Narrowing The Process Of Application
Banks have their standards and policies while providing loans. Plenty of paper works and frequent visits to the bank before you are granted your loan amount. On the other hand, P2P lending portals streamline the entire process with their e application. All a borrower needs to do is to set up his profile and request a loan along with notifying the interest rate at which he expects to repay the amount. Borrowers could then explore the list to connect with the ones that appear feasible.
- A faster process of funding
Banks take nearly week’s before they agree on sanctioning the loans amount. On contrary, lending apps automate the process and provide access to fund within a week. Additionally, a user can request an amount as low as £10, leading to greater traffic. Huge participation is witnessed on the app.
Pitfalls Of P2P Lending
While there are many who favor investing in P2P lending, many are concerned about security and prevalence of greater risk. P2P lending market suffers a major drawback in terms of uncertainty. Even though borrowers need to have a credit score before listing loans, yet few prefer lesser return but secured investment means. True borrowers benefit from the disadvantage, but this decline the overall trust entrepreneurs have on Fintech investment.
The prospects of Fintech Innovation seems predominantly high and this not because of it’s growing size of industry but owing to the fact they’re nearly all sectors have had an impact of Fintech Innovation.
It has transformed the sector of Financial Services and would contribute to the disruption of the financial world. Industries such as RegTech, InsurTech, and WealthTech are already hit by its storm and the craze of this explicit technology does not seem to fade.
Considering the current market trends, it would not be wrong to state that p2p Lending has revolutionized the entire industry. To add to this, it has opened doors for all the start-up enthusiast to vent in P2P lending apps to kickstart their business.
How does the future of Fintech transform the digital world is what we look forward to seeing.