P2P lending platforms offer unsecured personal loans for interest rates as low as 12%, which makes it an attractive option when one realizes that the process is entirely online and one doesn’t need to step out at all. One can even get Online Personal Loans with no or low CIBIL score. But wilful defaulters are not entertained even by P2P Lending platforms.
Following are a few benefits of taking an online personal loan: -
- Hassle-free: Most of the online personal loans do not require any kind of security or collateral. They also have a faster approval process where borrowing is much easier as compared to secured loans.
- Interest flexibility: While one can also do multiple transactions on a credit card to increase the credit score, online personal loans are better as an option. We know that credit cards would make the process more convenient, but one might have to bear higher interest rates. Also, the initial limits of credit cards would be much lower as compared to repayment capability
- Comparison Window: Unlike fixed credit line, one will have multiple prospects to choose from. This can happen by comparing different borrowing options and considering the best one
- Pay of Credit Card Debts if Any: As the rate of interest will be lower than Credit Cards, taking unsecured online personal loans to assist in paying credit card dues will hasten the process of being debt-free. Although initially, the total amount borrowed remains the same, one can fill up the gap faster with the net interest gains
- Clear way for future loans: If one pays off personal loans on time, it adds value to future loaning prospects. About 55% of the credit score depends upon the credit history. Therefore, if one is regularly repaying loans, it shows one can responsibly manage debts. The overall history of credit weighs more in the credit score than one single big loan. Hence the lender might be relying more and give loans on better terms or interests.
P2P Lending platforms are recognized by the Reserve Bank of India and continue to grow at a rapid pace. P2P loans can be availed for a wide range of reasons – from debt consolidation, credit card payment, and medical emergency, to home renovation, marriage loans, and even travel loans. But one should always consider all the factors before taking a personal loan and should always have some backup in case of loan crackdown.
The author, Raghavendra Pratap Singh is Co-Founder, i2iFunding.com