P2P lending

P2P lending services are a new step in the money exchange system. Providing credit services P2P lending platform, where private individuals directly invest their money to provide a loan. Terminologically, P2P stands for "peer-to-peer", which comes from the English language and translates as "from user to user".

Issuance of a P2P loan

Qualitatively describe this type of loan, perhaps using an analogue of its name - peer-to-peer lending. There are no intermediaries - only 2 persons providing the use of funds. This became possible thanks to the active use of the Internet by private exchanges, where it is possible to find conditions for the transfer of funds that satisfy both parties.

Guidelines for issuing a P2P loan:

1) definition of a reliable and verified platform. Landmarks: positive reviews and a wide range of offers;

2) registration. Providing reliable data will simplify communication with a future investor, because the latter may require documentary confirmation of personal data;

3) searching for an investor and detailing all the essential conditions of the transaction. These include the size and term of the loan;

4) the obligation to provide personal information and its confirmation rests on both the investor and the borrower;

5) establishment of the interest rate;

6) conclusion of the contract. As a rule, this happens by drawing up a receipt or signing an electronic document;

7) transfer of funds to the borrower's account. It is worth taking care of a working electronic wallet or bank card in advance.

Mechanism of work of P2P platform

Borrowing money from private individuals is not the sphere of banking regulation, which means that it removes all the factors of mediation, which eliminates all bureaucratic inconveniences and intermediaries who are ready to charge interest for each of their actions.

It is fair to note that virtual platforms, at first glance, may seem like intermediaries, but they are not part of the credit agreement, but only accompany it. The main goal of the platform is to create convenient websites that allow interaction between investors and lenders.

Features of P2P platforms:

• in essence – a web resource (site) with an accessible and intuitive interface;

• the possibilities of the instrument are available only after registration;

• site moderators can check, evaluate and even block suspicious accounts;

• all registered project participants have their own rating, which reflects the number of successful transactions;

• each user can comment on the work of another without the right to delete the feedback.

Advantages of P2P lending

P2P lending arose as a protest against formal, lengthy and meticulous financial procedures in banks. As a result, it turned out to be an efficient way to get borrowed money directly from the person to whom these funds belong. Thus, both parties are interested in the deal and are ready to discuss exactly the details that concern them at the moment.

Summing up, it should be said that P2P lending is a mechanism that enables the transition to a better and more convenient way of performing monetary transactions.