Peer to Peer Lending: Personal Loan for Low Salary/CIBIL Score & No Credit
Proliferation of advancing digital technologies is helping financial institutions connect with borrowers with ease. And at the same time, getting a credit is becoming less headache to the borrowers. This is because they now have ample of avenues to compare and get any type of credit such as home loan, car loan, or credit card etc. And one of the most in demand category of credit is the personal loan. These are unsecured loans and are considered to be the most easy to get category of finance. However ease of getting a loan is applicable to specific category of individuals and these are people with good CIBIL score. But not everyone can have a decent score to qualify for credit. And considering India’s strict regulatory rules, it has become very difficult for the following three categories of individuals to get personal loan:
- Poor or low CIBIL score
- Poor salaried
- No credit history
What is peer to peer lending?These are online marketplaces (i.e. websites) through which borrower can connect with multiple lenders (basically individuals/companies). Borrowers upload their details on the website and lenders will access these details and then take a call whether to provide loan or not. So basically PTPL make personal finance accessible similar to financial institutions but difference is there is no involvement of bank in the process.
Here are the eight prominent PTPL (peer to peer lending) companies in India:
So how do P2P lenders differ from traditional financial institutions?Listed below are the features of peer to peer lenders and traditional financial institutions such as private, private, co-operative banks and others:
- No involvement of banks in the functioning of P2PL companies. They work bank-free.
- Interest rate: Decided between borrower and lender as per the agreement and is fixed
- Small loan amount (differs for each company) compared to financial institutions
- Repayment time frame is low
- Speedy loan processing and disbursement
- No physical documents required unlike banks who send their executives for document verification. In case of these lenders, documents are required to be uploaded online on their website.
- Your details are highly secured. Financial data is not shared with credit institutions. So even if you default, you have ample of choices to pay personal loan installments. But remember that PTPL has a clause to take legal action against defaulters or make use of recovery agents.
Hi, I am Nikesh Mehta owner and writer of this site.
I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business.