Online Lending: A Better Choice?
Growing interest rates discourage people from borrowing from banks and lending agencies. Instead, they look for other alternatives to get the money that they want, without paying for such interest rates.
The online community jumped into this opportunity and used the World Wide Web as a platform for people to lend and borrow money regardless. In short, the Internet has become a multi-lending platform, with technology companies like Vyze offering people and companies a new approach to financing.
What is multi-lending?
Multi-lending is often synonymous with peer-to-peer (p2p) lending and most recently, marketplace lending. The idea of such methods is to match borrowers and lenders through various online platforms. Think Tinder, but from a business and financial perspective.
Borrowers can get their funds quickly at much lower interest rates compared to borrowing from banks. Lenders, on the other hand, are comprised of different players, from individual business owners to institutional investors. Due to its less complicated nature, people see multi-lending platforms as an alternative to traditional lending methods.
How safe is it?
Marketplace lending is growing fast and has both its pros and cons. The upside of this method is that people can easily borrow money at lower interest rates. Lenders also have more security as their money is spread to different borrowers.
The risk, however, lies in the fact that there is no security if the money will be paid back. The transaction is also not covered by any government backed financial services.
Over the years, however, such platforms have made their safety fund to protect lenders from incurring losses. Should you give it a try? Yes, it is worth one. The risks might be high, but the track record of such method is stable for the past decade and is continuously becoming stronger.
Like in any investment and loan application, you need to make an educated and wise decision to minimize the risks on your finances.