Bank lending or registration loans are that type of lending of money where the bank is the lender and the individuals or companies, or associations are the borrowers. The banks provide funds to the borrowers as per their credit worthiness. It is a very formal and cumbersome process. Plenty of legal documents are required. The amount of interest rate charged from the borrowers is also quite high. The banks also have to follow rules of credit limit of their National Bank, therefore, the credit creation process is sometimes slowed down and hence the amount of credit provided might be less than the amount that is required.
It is relatively a new process of lending and borrowing money. It is a web based lending of money where individuals lend money to other individuals. The following are the characteristics of lending:
• Individuals and small businesses lend money • Web-based system to attach investors and lenders • Credit worthiness of the borrower is the most important factor before lending money • Rate of interest also depends on the creditworthiness, if the creditworthiness of the borrower is low then a high rate of interest would be charged and vice versa • There are web-based clients like Society One or Rate Setters who facilitate this Lending. • The rate of interest provided to the investors is higher, and the rate of interest charged from the borrowers is lower than the bank’s rate.
• There is no interference of the banks in P2P lending
The registration loans in Phoenix have gained immense popularity in phoenix. Individuals are better off starting their businesses with the Lending. On the other hand it also has multiple advantages and disadvantages.
Phoenix market
Mr. Lee asked the bank for a loan of $5000 for his first car, but the bank simply refused. Ms. Johnson wanted a personal loan of $10000 for some urgent needs, but the bank denied it straightway. There have been many refusals on the part of the bank. People have always wanted to grow more, but this financial hindrance has always creped in. Intermediary like The Rate Setters has brought in a tremendous change in the lending and borrowing market of Phoenix. P2P lending has given way for the following advantages over bank lending:
• Ease of getting loans • The rate of interest payable is less for the borrower, and the rate of interest charged by the saver is high than bank term deposits. • Protection to both the lender and borrower • Flexible loans for a term ranging from 6 months to 5 years • Easy repayment • Variation of interest rates as per the credit worthiness of the borrower
Regulators can set a profound challenge for the banks if they can make P2P lending hit. When you apply for the registration loan you will be able to make the simple and easy repayments where the rate of interest is also affordable and so you will also be able to get the secured loans without submitting much of the documents.