Peer to peer lending sites better than Banks – Here’s why?

With the onset of the new government last year, the country’s economy seems to be taking an upward turn. And this has been maintained after quite a few months as well. This turn in the upward direction is credited to many things, one of them being the financial industry. The financial industry has been taking an upward turn courtesy the many innovations that it has come up with over the years.

In the many innovations that this industry has come up with, one is the emergence of peer to peer lending sites. The financial industry is also trying to be in lieu with the growing trends in the digital marketing arena. Keeping this in mind, it has come up with an amazing idea of peer to peer lending sites. These site help people borrow and lend money right from the comfort of their home.

Well, you must be thinking how is it beneficial as compared to banks?

Here’s the trick. It is extremely beneficial for both lenders and borrowers as compared to financial transactions with banks, that is basically lending or borrowing money from banks. Let us see how.

How the whole cycle with the banks works is that you lend money to banks at a certain rate of interest, let’s say 9 %. This means as a lender you will be getting 9% rate of interest on the amount you have lent to the bank. Then the bank checks out people who have come up to borrow money from them. The bank then selects the borrowers and lends them money on double rate of interest. So, if they have borrowed money on 9% they will lend it to the borrowers at 18% earning a huge profit in between.

But, with platforms like LB Circle coming into picture, both the lenders and borrowers can have a sigh of relief. This platform gives you the flexibility to decide upon the rate of interest on your own. This means that both the lenders and borrowers can lend and borrow money on decided terms and conditions including the rate of interest for the loans. So if they decide upon a mutual rate of interest in between 9 and 18%, say 13- 14%, it will be beneficial to both.

Not just this, there are various other benefits attached to a platform like this which include, debt recovery assistance, EMI scheduling and so much more.