10 reasons why you should lend
By Anurag Srivastva | 15 Mar 2020
If you are looking at a unique investment opportunity for higher yields, then you can lend on peer-to-peer lending platforms. These lending platforms bring borrowers and lenders together and you can use the platform to give a personal loan directly to a borrower. This may be a new product, but it combines the rigors of technology driven credit assessment and higher yields.
Ten reasons to use the online lending platform
- These platforms offer a good opportunity to allocate idle funds to lend to borrowers at higher than market rates of interest.
- The sound credit assessment and credit grading system ensures that your risk as a lender is substantially mitigated
- As a lender you can negotiate directly with the borrower and take a decision on whether you want to give the loan or not.
- Lenders on this platform have at their disposal a very detailed and granular credit and risk assessment done; to assist in lending decisions.
- The platform offers a complete palate of borrowers based on risk profile and you can match your return requirements with your risk appetite and risk capacity.
- The lending platform offers a good way to diversify your risk. Since there are multiple borrowers with varied credit history, you can pick and choose.
- This is an agnostic platform and enables credit decisions based on transparent information sharing. There is limited human bias in the credit decision.
- Since you have an array of borrowers, you can set a target yield for your P2P lending portfolio based on your return requirements. Then you can tweak the borrower list based on the risk you are willing to take and you are en route to your goals.
- RBI regulation of P2P lending platforms ensures better regulatory oversight into the P2P lending business and such regulation contributes to making it safer for lenders.
- P2P lending is a great addition to your investment portfolio. Unlike traditional asset classes like equity, bonds and gold; this business has low correlation. That enhances returns by optimizing risk.
P2P lending may be a new introduction in the market but it has its own merits and is a worthy option for you to consider.