Scrutinizing the concept of blockchain-powered peer-to-peer lending platforms

 A P2P platform is a direct marketplace for performing money lending activities. Through this platform, any individual can lend money from others where the lender and the borrower are matched via online services.

Lenders are able to go through profiles of borrowers who are looking for money and can offer an amount to individuals or businesses that they find most promising. The borrower can either be a legal person looking for a loan or an individual. 

Why peer-to-peer lending platform came into existence? 

In global finance, almost all banks are losing their cartel in the financial market. The prime reason for this loss of customer trust. 

After this dramatic fallout, many people started to search for an innovative and safe alternative model for financing. This lead to the development of a blockchain-based P2P lending platform. In a blockchain-powered P2P lending platform, individuals lend money to borrowers instead of investing it.



How does it work?

The blockchain-based peer-to-peer lending platform is a straight forward process. 

Initially, a borrower who is interested in obtaining loans must fill online applications on the peer-to-peer lending platform. 

The platform analyses the application and determines the risk and credit rating of the applicant. 

After the application is approved the applicant receives various options from the investors based on his credit score and interest rate.

The applicant can go through the options and can choose one of them. 

Finally, the applicant is totally responsible for paying the interest and repaying the amount at maturity. 

Advantages of the peer-to-peer lending platform:  

The peer-to-peer lending platform provides some significant benefits to both borrowers and lenders

·         P2P lending generally provides higher returns to the investors when compared to other types of investments.

·         For some borrowers, peer-to-peer lending is a more easily accessible source for funding than traditional loans from the financial system.

·         P2P loans usually come with lower interest rates due to the competition between lenders and lower origination fees. 

Conclusion 

The entire world is witnessing the sudden rise of peer-to-peer lending platforms. So Individuals and businesses are looking for a faster and hassle-free way to borrow money. The blockchain-powered peer-to-peer lending platform is more flexible and efficient than the banks; therefore, they attract a more massive crowd of borrowers and lenders

Comments

Post a Comment

Popular posts from this blog

Blockchain Development Services and Company

Image
Blockchain is no more a buzzing word! The tech world has proven its true potential through various real-time project implementations in fintech, healthcare, supply chain, rail freight, voting, gaming, real estate, energy consumption, and so on. Blockchain is considered as one of the notorious inventions since the inception of the internet. Common people may think the technologists create hype for this DLT, but it mimics the internet's growth rate in the last decade.  Internet is the tech behind P2P transfers of information with centralized governance, whereas blockchain transfers values in the P2P network with decentralized, community governance. In this blog post, let's look at the major industries that require adopting blockchain technology to their solutions! Top 5 industries that are revamping its processes with blockchain technology Supply Chain Management           Supply chain management is a tiring and cumbersome process that ...
Read more

What makes NFT stand out from the crowd, and why brands embrace them?

Image
Non-Fungible tokens have been the most-talked topic in the crypto space. It creates monetizing opportunities for several different brands and collectors.  This is mainly because they are feasibly authentic, highly secure to trade, and can include a wide range of branding opportunities.  At its core, NFT is a rare and one-of-its-kind token. They cannot be replicated or be equated to any other asset. In this way, the developers can utilize NFTs as an effective way to individualize assets on the blockchain. Starting from real estate to personal identities, the NFTs market provides some new and exciting opportunities for all crypto users.  How it got started?  Initially, NFTs gained popularity in the gaming sector. Gaming developers realized they could provide more value to users using these token standards. They strived to integrate NFTs within the gaming ecosystem, such as character, property, and other unique aspects. Crypto kitties were the first game to le...
Read more

How can blockchain consulting services guide you towards the next-gen revolution?

Image
Blockchain was invented as the underlying technology behind cryptocurrencies. But, as of now, it's booming and has become ubiquitous in every industrial process. As the leading brands have already delved into build blockchain technology solutions for their operations, the enterprises are now showering interests to build customized solutions for their processes.  Blockchain consulting services can guide you through the entire process of implementing a blockchain framework in your business operations. Right from raising funds for the project to marketing, the professional team can take you seamlessly through the process of evolution. You may consider hiring a blockchain development company to build solutions rather than recruiting individual blockchain experts, designers, and marketers.  In the next-gen revolutions, there are potential key aspects that blockchain adoption would render its users. Let's go through the key features that are beneficial to enterprises with bloc...
Read more