Instant financing has become the easiest way to get a loan. There might be some unexpected emergencies in life like medical emergencies, losing your luggage in your tour or weddings, etc. Instant financing helps you by providing funds during times of financial crunche.
What is instance finance?
Instant finance, as the name suggests is getting finance or money instantly. This is a paper free process, unlike bank loans. The loan amount is generally small and must be paid off within a short period of time. Instant finance gets you covered in case of any unexpected circumstances. With the whole world being online, banks and several other finance institutes have equipped themselves to operate digitally. Instant financing eliminates the need to go to a bank and go through the elaborate process to get your loan approved. Instead, you can get a loan online with just a few clicks. Its paperless and faster processing made it a hit. Instant finance is also called quick loan or personal loan.
Players offering instant finance
There are two types of instance loan providers in the (fintech) financial technology category-companies that are non-banking finance companies (NBFCs) or ones that work with an NBFC and peer to peer lending. One must note that these companies charge you processing fees, apart from keeping the interest rates high. They do not follow RBI guidelines while charging rate of interest. All they need is proper documents like your salary slips, identity proof, photograph, bank statements and address proof. They provide restriction free end use loans, without any collateral. They process your request instantly and grant you a loan. There are many apps and online websites offering their services in instant financing.
Can any individual offer instant financing?
If an individual wants to enter the financing market to lend to users,he can certainly do so. As mentioned earlier, there are two types of loan providers. One of them is peer to peer lending. What is peer to peer lending? And how does it work?
Peer to peer lending makes it easier for individuals to get loans, directly from other individuals, without any middlemen. It is also known as social lending or crowd lending. To be part of this, the lender should register himself with a peer to peer company. Peer to peer lending is a platform that brings lenders who want to lend their money in return of high interest rates with borrowers who need money for their personal reasons. For a borrower to get a loan through P2P platform, he needs to register himself with proper documentation of income, educational qualification, PAN card details. Lenders who like your profile would approve your loan request. The borrowers have a right to bargain on the set rules and conditions and come to consensus with the lender.
Reasons why one should offer Instant Financing
The investor need not do much to go and lend money. All he has to do is get himself registered in any of the P2P websites and wait for borrowers to come to him. It is paperless and hassle free. Also, the amount is given to the borrower for a short period of time. So, it is earning money within a short span of time.
Peer to peer lending helps the lender get higher returns for his investment. The amount of returns is directly proportional to the risk the lender is willing to take. Higher the risk, higher the returns. However, the lender should stay well informed about the borrower to whom he is lending the money, loan agreement, loan originators, and things to expect in return.
Easy to use
All the P2P platforms come with their own instructions. It is not some rocket science. One can equip oneself well with the platform within several visits. You can make money anywhere, anytime, at your own comfort.
Using technology, P2P lending platforms minimize their costs. Cost is minimized because of the existence of virtual offices instead of physical branch networks. Since there is no book keeping, it exempts them from building up funds to comply with bank capital requirements. All this savings along with the interests you earn can be considered as passive income.
It is completely in the hands of the investor to whom he wants to lend the money. He will get a classified data of all the borrowers along with their documents. The lender can go through all of them and decide to whom he wants to fund.
It is the right of the investor to know what is happening with his money. He needs to be aware of every investment he makes. The P2P platforms give out all the information that the investor needs, like the background business of the borrower, his occupation and purpose of the loan. All of this information helps the investor in making a decision as to whether or not lend his money to the borrower.
Investments are subjected to their own risks. One must do proper research before getting into something to invest, else one will be prone to more losses than profits.