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Peer to Peer Lending – Is it the Wave of the Future?

Financial institutions and banks aren't willing to provide loans even to people with impeccable credit scores. So what is the best way for people with a low or low credit score to try to secure even a modest loan? The answer lies with the emergence of lending through social networks, a moderated online system that lets customers be able to borrow money directly from individuals.

The borrower has attracted to peer-to-peer loan websites as a simple option to obtain loans, even though the annual interest rates available by social lending institutions are often extremely high, as high as 35% or more for those with low credit ratings.

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If your credit score is excellent but peer-to-peer lending can be a simple option to obtain the short-term loan you need without having to jump through the hoops set by banks. Social lending websites were established to provide small loans (also known as "microloans" to potential entrepreneurs from third-world countries. 

The concept was to allow lenders to provide money not just as an investment, but also to aid the causes of people in need across the globe. The demographic of the borrower has changed from entrepreneurs who are hopeful in developing regions to "average Joe" seeking a loan to fund home repairs, a brand automobile purchase, or for his daughter's wedding.

It's thought that peer-to-peer lending is more secure than borrowing money from banks because the personal connection gives borrowers an incentive to repay their loans. If you are the "bank" you are a neighbor or friend you have greater personal responsibility involved in the repayment of the loan.  


Why To Go For Crowdfunding?

Crowdfunding is a method of raising capital with the collective efforts of friends, family, customers, and individual investors. This approach is related to the collective efforts of several individuals, especially online through social media and crowdfunding platforms and utilizes their networks to greater reach and exposure.

Several people are turning towards crowdfunding to fulfill their financial needs. There are several platforms that offer such a facility. You may know about these platforms from this source.

Crowdfunding can be a very viable option to fund your business dream. Let’s see why?

real estate crowdfunding

  • It allows you to take advantage of the resources of the largest global funding: Everyone from around the world.
  • It brings you a great group of people who believe the opportunity is really good at the customer loyal and avid supporter when launching your business.
  • It shares the risk among many, put a bit of financial pressure on just a few individuals.
  • This cuts out the banks, venture capitalists and professional investors to create business funding process following your terms.
  • It gives you the possibility to get involved with the people believe you even before launching your business. Exchanging knowledge and challenge each other will make you a stronger plan.

A successful crowdfunding platform not only provides your business with the necessary cash but creates a customer base that feels as though they have a stake in the success of the business.

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