A Peer-To-Peer (P2P) lending platform is an online platform that allows people to raise loans that must be repaid-with interest. The borrower can be a natural person or a legal entity. The interest rate charged on the loans may be established by the online platform or mutually agreed upon by the parties. P2P lending has shown to be the most effective way for startups and entrepreneurs to get their businesses off the ground when they require seed or venture capital. Taking a loan from a bank, on the other hand, comes with a higher rate of interest. Entrepreneurs can simply borrow money from individuals on this platform.
Peer to Peer (P2P) lending, in simple terms, is a type of social lending in which individuals can lend or borrow money. Because no financial institution is involved, lenders are free to choose who they want to borrow from. As a result of the increased rate of interest, this financing concept is gaining appeal among lenders.