There are times when a person may need extra cash, but money is sparse. What are you to do when an emergency situation arises?
Applying for bank loans can be tedious and often comes with a stack of required documents. The interest rates differ as well but are non-negotiable. One option is peer-to-peer (P2P) lending. P2P lending operates mainly online and does away with financial institutions. This benefits both the financier and the borrower.
Take New Zealand’s Rapid Loans for example. The company is a fast-response online loan provider that simplifies the lending process for borrowers. With a brief online application form and rapid response time, the loan relationship is simpler and the flow smoother. This is one of the advantages of ‘bank-less’ borrowing — there is less fuss when it comes to securing loans and the processing doesn’t take forever.
The Advantages of Borrowing
A few advantages of ‘bank-less’ borrowing include the following:
- It benefits small-scale businesses owned by individuals, instead of a massive financial institution.
- They have transparent and reasonable interest rates and borrowing fees.
- The loan’s terms and conditions are flexible and open to exploring options.
- The relationship creates a network and establishes trust and connections between lenders and borrowers.
- Credit scores do not necessarily represent a loan application.
This is relevant to the current property market in Auckland. The high housing prices are encouraging Kiwis to either borrow from lenders to be able to pay their rent or look for residence elsewhere. For Kiwis to be able to compete with foreigners and real estate investors, personal loans are considerable.
The Advantages of Lending
As a lender, having room for error and risking loss is a norm. Starting out with small disbursements and gradually increasing it as the lender-borrower relationship grows will protect lenders. Research and networking build trust. This brings confidence to lending and encourages a healthy service. A few benefits of lending include:
- Lending builds connections between a loan provider and their investment. Knowing where a lender’s capital goes creates advocacies.
- There are better chances of higher returns on investment due to research and network.
- By empowering others, a loan provider gains trust, respect, and admiration. This trait, along with exercising flexibility in negotiations, allows an investor to select where their cash goes to.
Sufficient know-how in technology enables peer-to-peer lending online. This provides borrowers a variety of options, quick transactions, and flexibility. ‘Bank-less’ borrowing is proving to be a new sector for investors to explore and borrowers to try.