As financial technology (FinTech) continues to advance at lightning speeds, experts are wondering if traditional banks could soon be going the way of the dinosaurs. We're already using our camera phones to deposit our cheques, moving money between accounts with our banking apps, and paying our friends, entrepreneurs, and freelancers with Paypal and Google Wallet to name a few.
The last great frontier in FinTech is loans. Many people still believe that they need to trudge to their bank to apply for a loan and then wait days, even weeks, to hear if they've been approved. But FinTech is already making tremendous strides in changing the future of loans, especially with the growing public popularity of P2P loans. Keep reading to learn all about P2P loans, how they're breaking down borders created by traditional banks, and why that's a good thing.
A peer-to-peer (P2P) loan is granted without a bank's involvement. Instead, borrowers are matched with lenders over an online platform. Some of the most well-known P2P loan companies in FinTech are LendingClub, Prosper, Funding Circle, and Jimubox. The practice of P2P loans is sometimes referred to as social lending or crowdlending, too. This type of loan is most popular among small businesses and individuals looking for a personal loan.
FinTech loans boast a wide array of benefits to lenders and borrowers alike, which is why they're the second most funded sector in FinTech after payment companies. As of 2018, P2P loans are already gaining traction with millennials, but international citizens of all ages stand to benefit from these loans as well, whether they're looking to pay off a credit card, fund a medical surgery, or go back to school. So, let's break down the most valued aspects of P2P loans:
These are just some of the many, many benefits of FinTech loans. To see these P2P loans in action for yourself, try them out next time you're looking for a personal loan or extra funding for your small business.