e7
Posts: 29 
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Post by e7 on Jan 2, 2017 22:03:30 GMT
I was asked earlier by a friend why borrowers use p2p lending and not the usual banks I got the feeling he felt that the banks obviously felt the borrowers too risky and therefore refused them and he might be right but I just wondered if there are many other reasons why borrowers would choose p2p over banks
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Post by sannytwist on Jan 2, 2017 22:14:08 GMT
Well l think its easier to get credit from p2p , there are platforms using the usual credit agencies but also those that loan out with security.
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kulerucket
Member of DD Central
Posts: 336
Likes: 93
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Post by kulerucket on Jan 2, 2017 22:28:16 GMT
I would say either they do not have a good enough credit rating or they like that it's easier to get the money without considering/understanding the costs. Getting a loan from a bank requires a lot more paperwork like proof of earnings, assets etc.
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stub8535
Member of DD Central
personal opinions only. Not qualified to advise on investment products.
Posts: 1,447
Likes: 945
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Post by stub8535 on Jan 2, 2017 22:55:54 GMT
Could it be that the loan process with a bank takes too long, borrower does not use the right mayfair club, does not wear the right regimental tie........
Loads of banks have tightened up lending criteria as they don't want to get red fingers. they also may have lent all the government stimulus cash and just want to sit back and watch the profits roll in to boost their bonus as most banks still insist on giving performance against peers bonuses.
Lots are introduced to platforms by middlemen. These people know the different types of funding available and can greatly help a struggling company survive through cash flow crises.
Any money that disrupts the established banks is a good thing as it makes them compete or shrink.
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james
Posts: 2,205
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Post by james on Jan 3, 2017 10:06:23 GMT
For some loans like bridging or development the P2P can be cheaper than the rates typically offered for that type of borrowing. For other things like pawn the banks just might not want to do that type of busibess as a policy decision.
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