Know the Disadvantages of P2P Lending For Those Of You Who Want To Get Started
5/17/2022
Investment is one way to secure your finances in the future. Recently, the trend to invest is increasing and the types of investments are increasing.
Peer-to-peer lending is one way to make investments that is also trending . Before making this investment, let's learn what are the disadvantages and risks of doing peer-to-peer lending ?
Let's start by knowing a little about what peer-to-peer lending is and how it works.
What is Peer-to-Peer Lending
Peer-to-peer lending which is also known as P2P Lending is an investment method that is done by lending money or funds to businesses or individuals. who lend money or are called as lenders or investors will benefit in the form of interest on the loan.
Different from other investment methods, peer-to-peer lending directly connects the lender to the borrower, eliminating intermediaries such as banks that act as conventional financial institutions.
How Peer - to - Peer Lending Works
The peer-to-peer lending is carried out using an online platform such as an application that is a facility for investors and borrowers to make transactions directly. explanation of how peer-to-peer lending clearer
Borrowers apply for loan funds to help fund their businesses, but there are drawbacks to this process. The following are some of the disadvantages of conducting peer-to-peer lending for borrowers:
Although investments are made to make a profit, there are drawbacks to each type of investment made. The following are some of the disadvantages of conducting Peer-to-Peer lending for lenders:
Well, that's the drawback of peer-to-peer lending . Before starting to make this investment be sure to find out about the platform that will be used. In addition, make sure to protect yourself from potential financial risks by having insurance. Super You provides online insurance that is easy to get at prices that are safe in the pocket. Come on, what are you waiting for? Protect yourself and your finances now!
Peer-to-peer lending is one way to make investments that is also trending . Before making this investment, let's learn what are the disadvantages and risks of doing peer-to-peer lending ?
Let's start by knowing a little about what peer-to-peer lending is and how it works.
What is Peer-to-Peer Lending
Peer-to-peer lending which is also known as P2P Lending is an investment method that is done by lending money or funds to businesses or individuals. who lend money or are called as lenders or investors will benefit in the form of interest on the loan.
Different from other investment methods, peer-to-peer lending directly connects the lender to the borrower, eliminating intermediaries such as banks that act as conventional financial institutions.
How Peer - to - Peer Lending Works
The peer-to-peer lending is carried out using an online platform such as an application that is a facility for investors and borrowers to make transactions directly. explanation of how peer-to-peer lending clearer
- Register to the platform used. This must be done for investors and borrowers . The process can be done via a computer or smartphone .
- After registering or logging in , borrower can start applying for a loan.
- loan application submitted will be analyzed by the platform to assess whether the borrower eligible to apply for the loan.
- If it has been analyzed and selected by the platform, the borrower will be in the peer-to-peer lending marketplace and equipped with complete information about the profile and risks of the borrower .
- Investors can analyze and select borrowers in the peer-to-peer lending marketplace based on the information provided by the platform.
- Funding transactions occur with borrowers and investors.
- After the repayment schedule has been scheduled, the borrower will return the loan.
- Investors will receive loan refunds from borrowers via the platform.
Borrowers apply for loan funds to help fund their businesses, but there are drawbacks to this process. The following are some of the disadvantages of conducting peer-to-peer lending for borrowers:
- The bill will be very significant when you are late paying
- When you fail to make loan payments, the amount to be paid will increase
- The longer the term of the loan, the more bills, therefore a loan is a method that is suitable for short-term use
- Although it is possible to fulfill the loan funds in full, it is not guaranteed that all of them will be fulfilled
Although investments are made to make a profit, there are drawbacks to each type of investment made. The following are some of the disadvantages of conducting Peer-to-Peer lending for lenders:
- Unlike depositing money in a bank, when allocating money in peer-to-peer lending , you can't withdraw it at any time
- There is a risk that the borrower fails to repay the loan and the loaned funds disappear
- The risk falls entirely on the lender where there is a risk that the borrower of funds is in arrears or cannot pay it
Well, that's the drawback of peer-to-peer lending . Before starting to make this investment be sure to find out about the platform that will be used. In addition, make sure to protect yourself from potential financial risks by having insurance. Super You provides online insurance that is easy to get at prices that are safe in the pocket. Come on, what are you waiting for? Protect yourself and your finances now!
