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All About P2P & How it Works
Peer to Peer Lending / Loans , known also as P2P loans, don’t come from traditional lenders like banks, credit unions, and finance companies. Instead, you're borrowing money from another person, or multiple people which is now regulated by RBI in India. You'll pay interest on your loan, but may have an easier time getting approved for one of these over a traditional bank loan.
What Is P2P?
P2P loans have changed the world of lending in the recent time. In the broadest sense, a P2P loan can happen between any two people I.e Borrower & Lender , including loans from friends and family. Any two people can set up a loan and repayment arrangement that is mutually beneficial & Agreed upon preferably with a written agreement.
That said, P2P lending usually refers to an online service that handles all of the logistics for both borrowers and lenders. In addition to providing agreements, payment processing, and borrower evaluation, P2P lending makes it easier for people to connect. Instead of borrowing only from people you know or those in your community, you can access each company's website and sign up to borrow from individuals and organizations nationwide.
Numerous websites have made P2P loans widely available. OML P2P (Ohh My Loan) is also one of them in India, but there are plenty of others, and new lenders appear regularly.
Why Use Person to Person Loans?
You might wonder why you’d try a P2P lender instead of a traditional bank or credit union. P2P loans can help with two of the biggest challenges borrowers face: cost and approval.
Lower costs: P2P loans are often less expensive than loans available from traditional lenders, including some online lenders. Applying for a loan is typically free, and origination fees tend to be roughly five percent or less on most loans. Perhaps most importantly, those loans often have lower interest rates than credit cards. The most popular lenders offerFixed Interest Rates so that you have a predictable, level monthly payment. P2P lenders don’t have the same overhead costs as the largest banks with extensive branch networks, so they pass some of those savings on to borrowers.
Easier approval: Some lenders only want to work with people who have good credit and the best Debt to Income Ratios . But P2P lenders are often more willing to work with borrowers who’ve had problems in the past or who are in the process of building credit for the first time in their lives.
With good credit and a strong income, loans are less expensive, and that’s also true with P2P lenders as well as traditional lenders. But in many communities, lenders who are interested in working with low-income borrowers or people with bad credit tend to charge substantially higher rates and fees. Those borrowers then have just a few options, like payday loans similar products.
A few P2P lenders, such as Net Credit, offer loans for people with credit scores as low as 520. Other P2P lenders that make loans to people with a less-than-optimal credit score can charge up to 36 percent interest, but this still beats a payday loan.
How it Works
Each P2P lender is different, but the idea is that there are lots of people out there with money to lend, and they’re looking for borrowers.
These individuals would like to earn more than they can get from a savings account, and they’re willing to make reasonable loans. P2P sites serve as marketplaces to connect borrowers and lenders. Prosper.com modelled itself after an “eBay for loans.”
Qualifying: To borrow, you generally need decent, but not perfect, credit. Again, different services have different requirements, and lenders can also set limits on how much risk they’re willing to take. At most big P2P lenders, several risk categories are available for investors to choose from. If you have high credit scores and income, you’ll fall into the lower-risk categories. Some lenders look at “alternative” information such as your education and work history, which can be handy if you have a limited credit history.
Applying: With most lenders, you just fill out an application that’s similar to any other loan application. In some cases, you’ll provide a personal narrative or otherwise tell lenders about yourself and your plans for the money. You might even be able to use social networks to help you get approved. Once your application is accepted, funding might be more or less instant, or it could take a few days for investors to decide to fund your loan.
Costs: You’ll pay interest on any loan you get, and your interest costs are baked into your monthly payment (those costs generally aren’t billed separately). In addition, you’ll likely pay an origination fee of several percent of your loan amount, although the better your risk profile, the lower the fee. Be sure to factor in that cost as you set your loan amount, because it may reduce the amount of cash you end up getting. Additional fees may be charged for things like late payments, returned checks, and other irregular transactions.
Repayment: If your loan is approved, you’ll generally repay over a period of three to five years, but you can usually prepay without any foreclosure charges. Payments come out of your checking accounts directly unless you set up something different, so the process is effortless.
Credit reporting: The most popular online P2P lenders report your activity to credit beauraus . As a result, your on-time payments will help you build and improve your credit, making it easier to borrow on better terms in the future. However, if payments fail to go through or you default on the loans, your credit will suffer. Make those payments a priority and communicate with your lender if you fall on hard times.
Lenders: There are several P2P lenders to choose from, and more open up shop every year. and you can try for personal and business loans from this lender. Upstart is a growing competitor for personal loans, and Funding Circle is a growing business lender.
The original P2P lenders funded your loan from other individuals. Now, the space is evolving, and financial institutions increasingly fund loans, whether directly or indirectly, instead of individuals. If that matters to you (you might not care – as long as you’re getting a loan from somebody), research the service you’re thinking of using and find out where funding comes from.
P2P DIY
Person to person loans aren’t limited to established online sites. You can set up loans informally or use crowdfunding methods instead of going through mainstream sites. To avoid any problems, discuss your plans with a local attorney and tax advisor. You may need to use a written agreement and follow certain rules to get the results you want. Local professionals are able to help, and several online services provide customized agreements.
For more information visit our website at - www.omlp2p.com
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Top Reasons to Get a Personal Loan in India
A personal loan can help you meet financial emergencies or pay for significant purchases when you don’t have the cash available upfront. People take out a personal loan in India for various purposes including debt consolidation, wedding expenses, credit card payment loan, home renovation, etc.
But, is taking a personal loan a good option to tide over financial emergencies?
Well, personal loans provide a safe alternative compared to asking relatives for help or mortgaging your assets, which is a common practice in India. Personal loans have become even more popular with the evolution of P2P lending sites such as omlp2p.com that offer unsecured loans online at attractive rates from your peers.
Here are five common reasons why people apply for a personal loan in India:
Pay for a Wedding
Indians love to host lavish wedding parties that can cost several lakhs of rupees. However, not everyone has enough cash to pay for the wedding of their dreams.
Thankfully, it is possible to take online personal loans for up to [3] lakhs to make good the cost of your wedding from peer to peer lending sites such as omlp2p.com to ensure a great wedding ceremony.
Undertake a Home Improvement Project
Are you planning to make some major improvements to your house? Whether you wish to knock down a few walls or buy new equipment and furnishings, it could cost you anything from a few thousand rupees to more depending upon the renovations you intend to make to your house. Using your savings is a popular option to pay for your home improvement project. However, if you don’t have enough equity built up in your home, you can always apply for a personal loan in India online to meet the cash
Debt Consolidation
Are you struggling to keep track of your repayments on multiple loans? Debt consolidation could be an effective strategy to pay off your loans sooner. Many people take personal loans at low-interest rates to pay off their other debts leaving only one financial liability on their hands. This strategy can not only save you money but also boost your credit score by reducing the number of debts on your file.
Covering Emergency Medical Bills
Unexpected medical expenditure could cost large sums of money, and if you don’t have medical insurance, it could be challenging to gather cash for expensive medical treatment instantly. An online personal loan for Medical Emergency can come to your rescue in such a situation.
Peer to Peer Lending sites allows you to borrow money without any collateral or cumbersome paperwork. The process is fast, quick, and efficient, ensuring you don’t miss out on proper medical treatment due to lack of sufficient funds!
Self-Improvement
If you feel you are ready for a jump in your career or wish to turn your hobby into one, furthering your education by investing your time and money in the right courses can help you get there. If you are thinking about the funds, you can apply for a personal loan in India to cover the cost of your education and pay back the loan in easy EMIs without burning a hole in your pocket.
Apart from the reasons listed above, people also take personal loans for Travel for funding their vacations, starting a new business, and even paying for their car. Indeed, there are plenty of reasons for choosing a personal loan in India, but you must remember that the money you borrow for the perfect wedding, or any other reason must be repaid. Therefore, it is important to consider your income and expenditure before borrowing money for a large purchase.
Get a Personal Loan at a Lower Cost Online
omlp2p.com is India’s premier peer to peer lending platform for unsecured online personal loans at affordable rates. You can borrow up to INR 10 lakhs, 100 percent collateral-free, for 3 to 36 months starting at a rate as low as 12 percent per annum. All you need to do is fill up a simple form and upload your KYC and other mandatory documents on our website – and that’s it – it’s almost as simple as ordering a pizza online. Visit the Personal Loan section on our website to know more.
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Non-Banking Financial Companies And Their Future
Non-Banking Financial Companies And Their Future
In the past few years, the Indian financial sector has witnessed tremendous progress. A number of small enterprises, medium-sized industries, and start-ups have emerged, attracting different forms of investments. The primary reason for their sudden growth has been the availability of finance from diverse sources. These new Non-Banking Financial Companies are not entirely dependent upon the government or the traditional lending institutions anymore. They also don’t have to deal with cumbersome loan procedures, credit delays, massive interest rates or unwarranted security requirements. In fact, the easy accessibility of funds has reduced their operational bottlenecks, thus resulting in seamless and steady development.
If you are wondering how all of this has been possible in such a short span of time, it would suffice to say that this success can basically be attributed to the rise of Non-Banking Financial Companies Peer to Peer Lending Platform (NBFC-P2P ) as a provider of micro-finance.
What Are NBFCs?
Registered under the Companies Act, 1956, Non-Banking Financial Companies (NBFCs) were essentially formed to provide loans, offer advances, and acquire marketable securities so that the Indian financial landscape could be made more inclusive. Even though they function under the broad directives issued by the Reserve Bank of India (RBI), they do not form a part of the formal payments and settlement system. Also, unlike their banking counterparts, they do not accept demand deposits. However, by mobilizing resources and providing small-ticket loans at affordable costs, they have been able to reach the smallest of borrowers. As a result, the commercial ecosystem has been completely transformed.
Nonetheless, before finding out what the future of Non-Banking Financial Companies (NBFCs) in India looks like, it would be wise to know a few details about their past.
NBFCs- The Past
The success of the NBFC model has not been immediate. Since their inception in the late 1980s, NBFCs have undergone a number of layered but significant changes, which have been instrumental in shaping their current performance. These include:
– The evolution of entry point norms to ensure that NBFCs are properly supervised and compulsorily registered.
– The consistent enhancement of minimum capital requirements, for a company to be granted the NBFC license.
– The classification of NBFCs on the basis of their asset size and functions to make sure that their processes remain structured and efficient.
– The persistent efforts to provide financial and operational stability to NBFCs, so that risks, if any, can be mitigated.
– The gradual increase in their lending limits to help them cater to a greater borrower pool.
All of these factors have collectively lead to the Non-Banking Financial Companies (NBFCs) becoming a highly sought after mode for both, individuals and companies, to avail secure and sustainable forms of finance. Nevertheless, the true potential of NBFCs can only be unleashed by strengthening their prospects in the future.
NBFCs- The Future
The future of NBFCs is most likely to be contingent on elements like:
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Availability of refinancing institutions like the recently launched Micro units development & Refinance agency (MUDRA) bank. These, when coupled with other alternate funding sources like direct deposits made by venture capitalists & high net worth individuals can prove to be a major source of NBFC finance.
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Greater opportunities for expansion into the previously un-banked semi-rural and peri-urban areas. Moreover, as Non-Banking Financial Companies (NBFCs) branch out into the specialized segments of infrastructure, capital markets, debt funds, asset acquisition, personal finance etc, their extent, structure, and scope is only bound to increase.
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By partnering with organizations like payment banks, insurance companies, and asset management firms for enhancing coverage, widening the reach and providing all financial benefits under one umbrella, NBFCs will be equipped to firmly establish themselves as a credible lending option.
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Using the ever-changing online space for connecting with borrowers who have been neglected by banks for want of a credit score, will enable NBFCs to fulfill a crucial financial gap. Many online lenders will operate either as an NBFC or as a P2P Lending Platform to help people find easy and cheap investment venues.
With such a promising and bright future, it comes as no surprise that marketplaces like Low Interest Personal Loan Online have carved a pivotal place in the fin-tech sector. Being an NBFC-P2P Lending platform, OML provides alternate and innovative financing at highly attractive rates. This ensures that borrowers are not left at the complete mercy of conventional funding institutions. As new vistas open and the NBFC model succeeds, these companies are only going to grow from strength to strength.
For more information visit our website at - www.omlp2p.com
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How to get a personal loan despite a low CIBIL Score?
Personal loans for low CIBIL score
Ajay was happy and feeling proud. His daughter had recently got shortlisted for admission to one of the best schools in the town. She was about to take first step towards securing a bright future which Ajay had started dreaming of the day she was born. He now required to pay an upfront payment of Rs. 1 lac to secure the admission.
He did not have the amount readily available with him. So, he walked to his bank and applied for a personal loan.
After 3 days, he followed up with the bank only to know that his application has been rejected.
On inquiring the reason, he was told that he had a low CIBIL score.
He was quite sad. Like most of us he did not know about CIBIL and was completely unaware of his low CIBIL credit score or the reason behind it.
Ajay’s is not alone in facing a loan rejection. Several other people face the same ordeal when accessing loans to fulfill one or other important need that they have.
As per the RBI guidelines, all financial institutions such as banks, NBFCs and credit card issuers have to regularly submit the data pertaining to repayment of loans and credit cards to CIBIL and other three credit bureaus – Experian, Equifax and Highmark. All four credit bureaus use this data to provide their own credit scores reflecting the creditworthiness of borrowers. CIBIL is one of the earliest credit bureaus and hence, enjoys higher acceptance.
A CIBIL score ranges from 300 to 900, with 900 being the maximum. Since banks still follow traditional method of credit evaluation, they heavily rely on CIBIL score to provide personal loans.
A person who has not taken any loan or credit card in the past will have -1 score, which means this person does not have a credit history.
Hence, CIBIL Score becomes a key parameter in deciding whether or not you will get a loan.
Do you know? Banks typically approve loans which have CIBIL credit score of 750 or more.
Image Source: CIBIL, Apr 06, 2018; The number in the blue background is the CIBIL score.
Ajay discovered that his CIBIL Score was just 650. That was way below than required.
His bank manager also told him that with this score, it would be difficult to get a loan from any other bank too.
He had many questions in his mind.
“Why is my credit score low? I don’t even use credit cards anymore.?”
“How can I improve this score quickly?”
“What do I do now to pay the school admission fees?”
Reasons for low CIBIL score
Well, there could have been several reasons for a low credit score. Some of the key ones are as follows:
1) Missed or delayed payment on any loan or credit card: It is a borrower’s responsibility to pay the installments or credit card dues on time. It has been well demonstrated that delayed or missed payment shows lack of ability or intent on borrowers’ part to repay loans. Such borrowers usually default on loans and hence, are avoided. Therefore, one should make timely repayments.
2) Payment of minimum amount due on credit card: This is one of the most harmless looking reason for low CIBIL score. On one hand banks themselves give this option while on the other CIBIL penalizes for such behavior. Remember that interest rate on such facility ranges from 30% – 50% and banks love such customers. Idea behind this option was to allow credit card holders to tide over current financial stress and pay later without defaulting. However, if used regularly, this shows that the person doesn’t have financial ability to repay the amount as he is willing to bear such a high interest rate. Hence, he is not an ideal candidate for future loans.
3) Multiple loans or credit card enquiries: If you simultaneously apply for loans with multiple lenders or apply for credit cards with multiple banks, it shows that you are under financial stress. This adversely impacts the CIBIL score.
4) High utilization of credit limit: If the spend on your credit card frequently reaches the credit limit, it shows that you need to work on financial discipline and improve it. CIBIL considers this as a significant negative signal and penalizes your CIBIL score.
5) Type of Loans: You should have good mix of secured and unsecured loans. Secured loans such as home loans, car loans, loan against property etc. are backed by assets mortgaged by you i.e. if you do not repay, a lender can liquidate those assets to recover the loan. Unsecured loans such as credit card due, personal loans or signature loans are the ones where you have not provided any asset as collateral. You should have some secured and unsecured loans. Having just one type of loans adversely impacts the CIBIL score as it shows the person’s inability to get the other loan.
6) Wrong reporting by the banks or NBFCs: Another reason, though uncommon, is wrong reporting. You should periodically pull out your credit report to understand if there are any errors. This is because, if you require a loan urgently, an error in your credit report will hamper your chances to get a loan. It will take a month or so to reflect the change in your credit report.
Except for wrong reporting, it is not possible to improve your score immediately. It can easily take 6 months to a few years to get your credit score back on track.
In Ajay’s case, he had settled a credit card a few months back. This was the main reason for low cibil score.
Read more: Is your CIBIL Score low? Reasons and how to improve
Personal Loans for low CIBIL score
Ajay didn’t have so much time. For him, arranging money for his daughter’s school fee was the most important as of now.
Since the doors of the banks were closed to him due to low CIBIL score, he didn’t want to waste any more time. He was actively looking for other sources for the loan.
As he searched the internet, he came across the alternative loan platform of peer to peer lending.
Individual borrowers and lenders come together on this platform to take and offer loans. He found this interesting.
The platform screened the borrowers on various parameters and allowed them to set an interest rate that they were willing to pay for the loan amount.
The platform also guided the borrower on minimum benchmark interest rate based on their detailed credit analysis and prevailing market conditions.
The lenders would then connect with the borrowers and on mutual agreement, the loan would be made.
The repayments are made in monthly installments.
Ajay decided to try this out. All it required was to sign up and provide some basic details about himself.
The best part was that the screening went beyond the CIBIL credit score and evaluated 100+ other parameters such as financial behaviour, future financial prospects, education, demographics, socio-economic conditions, etc.
This brings out a holistic profile of an individual. Through this model a proprietary credit score is generated by the system, which then enables even someone like Ajay, who has a low CIBIL score, to access a loan.
Ajay provided all the required information and submitted his loan requirement of Rs. 1 lac for 1 year. His personal loan request was approved at 18% p.a. interest rate.
The very next day he received offers from multiple lenders.
Ajay was glad. The platform took care of the entire process and arranged the loan agreement between Ajay and the lenders. As soon as the amount arrived in his bank account, he paid the school admission fees.
Ajay is happy that he could get his daughter admission to one of the best schools in the city. He wants her to have the best possible education.
By the way, the platform Ajay accessed was that of www.omlp2p.com
Do you want to know more about peer to peer lending platform www.omlp2p.com
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P2P is here to pave a way for smart investors
The most precious resource we have today is time. From purchasing groceries to gold, we can now buy everything online. So, have you ever thought about lending online. Why have we been contingent on the traditional ways, while being hi-tech with everything else. The need to do burdensome tasks of submitting several documents and filling various forms and the never ending wait is now over.
Through our peer to peer lending platform, we fill this gap and provide the opportunities to lenders to invest their money into "Alternate asset class for investment” for better return. Borrowers are equally benefitted through availability of funding at their ease and convenience through a simple process for borrowing.
Save time, be smart and earn some passive income. Here are some reasons why Peer to Peer lending should be a part of your investment portfolio.
Investors are given full freedom to choose whom they want to lend; how much they want to lend (you can start as low as Rs. 5,000) and for what period do they want to lend depending on how risk averse or risk tolerant they are (period can be anything between 3 months to 36 months).
Furthermore, P2P lending helps you manage market volatility and earn higher regular fixed monthly income; through monthly EMIs.
Have you been investing in bank fixed deposits, mutual funds etc? Diversify and add value to your portfolio and become a smart investor by investing in P2P and enjoy an opportunity of earning higher risk adjusted yields. At OML you can earn interest from 12-29% depending on your risk appetite. Earn higher interest by selecting borrowers of your choice of risk profile.
Our credit team tries to minimise your risk through stringent credit assessments, intense borrowers due diligence and selection through our own proprietary algorithm We also have a tie up with CRIF to determine borrower’s risk profile”. In addition we have associated ourselves with one of the leading solicitors and law firms to take any legal action if required to protect legal interests of our investors. We have partnered with collection and recovery agencies too. Besides we also provide an insurance on your principle amount in case of death or permanent disability of a borrowers. In order to mitigate your risk we advise you to invest in various borrowers to diversify your risk so that you can manage your risk better and can look for higher return on your investment, net of any delinquencies.
Speculating how and when to invest in Peer to Peer lending?
Don’t worry all you need to do is open a lender account at www.omlp2p.com and follow a few easy steps. Don’t miss out on this relatively new but exciting alternative asset class and add value to your investment portfolio today!
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P2P Lending Vs Stock Market
When it comes to investment of our hard-earned money, really challenging to decide which is the right financial asset to invest in? In order to derive better returns from our investments, we need to critically analyse and compare all the possible options available to us for investing and take a final decision, as to which one is the better option; matching our risk and liquidity requirements and at the same time provide us with higher returns too (yields).
Risk is one of the most important deciding factors when it comes to investing. Investing in stock markets may give us high returns in long run but it comes with significantly higher risk and lack of predictability for timing to liquidity. We all know market volatility can turn out to be a nightmare, it’s difficult to analyse how long to wait to liquidate our investments in the stock market. The fear of losing your money can destroy the peace of your mind. Thus, stock market is not everyone’s cup of tea, as it requires a lot of time, energy and patience. Due to this fear of volatility causing stress, several choose to avoid the stock market, to manage their risk and regular requirements of liquidity.
Peer to peer lending is here to provide you with some peace of mind and high returns too. On an average you can earn returns between 15-18% p.a. Peer to peer (P2P) lending is rapidly emerging as a new innovative and lucrative alternate asset class for investment. With peer to peer lending you can mitigate your risk and upgrade your portfolio. Although when investing in peer to peer there is a risk of borrower’s credit, you can easily spread your investment into a basket of borrowers to minimize your risk and maximize your returns.
Stocks are generally viable for mid- long term so that you get more time to cover up with the losses that may incur. P2P lending tenure varies between 6 months to 36 months. If you need funds in a shorter span and do not want to lock your money for a long tenure, P2P lending turns out to be a better investment choice. With P2P lending platform, you can decide you own risk adjusted returns by lending to high quality p2p platform verified borrowers.
Which one will you pick?
Having said this, what investment option you pick is eventually dependent on what kind of an investor are you. If you are willing to invest huge amount of time and research into your portfolio and have the ability to pinpoint trends in the stock market, the stock market is for you.
However, you’d rather make awesome returns of 12-29% which can be higher than stock market. Investing in P2P is a seamless and hassle-free process. Right from registering to investing, everything is just a click away. It allows one to pick borrowers at a quick glance and invest happily.
Don’t you think it’s a perfect time to invest in peer to peer lending. Invest at www.omlp2p.com and let your money work hard and earn for you.
0 notes
Text
P2P is here to pave a way for smart investors
The most precious resource we have today is time. From purchasing groceries to gold, we can now buy everything online. So, have you ever thought about lending online. Why have we been contingent on the traditional ways, while being hi-tech with everything else. The need to do burdensome tasks of submitting several documents and filling various forms and the never ending wait is now over.
Through our peer to peer lending platform, we fill this gap and provide the opportunities to lenders to invest their money into "Alternate asset class for investment” for better return. Borrowers are equally benefitted through availability of funding at their ease and convenience through a simple process for borrowing.
Save time, be smart and earn some passive income. Here are some reasons why Peer to Peer lending should be a part of your investment portfolio.
Investors are given full freedom to choose whom they want to lend; how much they want to lend (you can start as low as Rs. 5,000) and for what period do they want to lend depending on how risk averse or risk tolerant they are (period can be anything between 3 months to 36 months).
Furthermore, P2P lending helps you manage market volatility and earn higher regular fixed monthly income; through monthly EMIs.
Have you been investing in bank fixed deposits, mutual funds etc? Diversify and add value to your portfolio and become a smart investor by investing in P2P and enjoy an opportunity of earning higher risk adjusted yields. At OML you can earn interest from 12-29% depending on your risk appetite. Earn higher interest by selecting borrowers of your choice of risk profile.
Our credit team tries to minimise your risk through stringent credit assessments, intense borrowers due diligence and selection through our own proprietary algorithm We also have a tie up with CRIF to determine borrower’s risk profile”. In addition we have associated ourselves with one of the leading solicitors and law firms to take any legal action if required to protect legal interests of our investors. We have partnered with collection and recovery agencies too. Besides we also provide an insurance on your principle amount in case of death or permanent disability of a borrowers. In order to mitigate your risk we advise you to invest in various borrowers to diversify your risk so that you can manage your risk better and can look for higher return on your investment, net of any delinquencies.
Speculating how and when to invest in Peer to Peer lending?
Don’t worry all you need to do is open a lender account at www.omlp2p.com and follow a few easy steps. Don’t miss out on this relatively new but exciting alternative asset class and add value to your investment portfolio today!
0 notes
Text
P2P Lending Vs Stock Market
When it comes to investment of our hard-earned money, really challenging to decide which is the right financial asset to invest in? In order to derive better returns from our investments, we need to critically analyse and compare all the possible options available to us for investing and take a final decision, as to which one is the better option; matching our risk and liquidity requirements and at the same time provide us with higher returns too (yields).
Risk is one of the most important deciding factors when it comes to investing. Investing in stock markets may give us high returns in long run but it comes with significantly higher risk and lack of predictability for timing to liquidity. We all know market volatility can turn out to be a nightmare, it’s difficult to analyse how long to wait to liquidate our investments in the stock market. The fear of losing your money can destroy the peace of your mind. Thus, stock market is not everyone’s cup of tea, as it requires a lot of time, energy and patience. Due to this fear of volatility causing stress, several choose to avoid the stock market, to manage their risk and regular requirements of liquidity.
Peer to peer lending is here to provide you with some peace of mind and high returns too. On an average you can earn returns between 15-18% p.a. Peer to peer (P2P) lending is rapidly emerging as a new innovative and lucrative alternate asset class for investment. With peer to peer lending you can mitigate your risk and upgrade your portfolio. Although when investing in peer to peer there is a risk of borrower’s credit, you can easily spread your investment into a basket of borrowers to minimize your risk and maximize your returns.
Stocks are generally viable for mid- long term so that you get more time to cover up with the losses that may incur. P2P lending tenure varies between 6 months to 36 months. If you need funds in a shorter span and do not want to lock your money for a long tenure, P2P lending turns out to be a better investment choice. With P2P lending platform, you can decide you own risk adjusted returns by lending to high quality p2p platform verified borrowers.
Which one will you pick?
Having said this, what investment option you pick is eventually dependent on what kind of an investor are you. If you are willing to invest huge amount of time and research into your portfolio and have the ability to pinpoint trends in the stock market, the stock market is for you.
However, you’d rather make awesome returns of 12-29% which can be higher than stock market. Investing in P2P is a seamless and hassle-free process. Right from registering to investing, everything is just a click away. It allows one to pick borrowers at a quick glance and invest happily.
Don’t you think it’s a perfect time to invest in peer to peer lending. Invest at www.omlp2p.com and let your money work hard and earn for you.
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Low Credit score - Ways to Strategize and Improve your CIBIL Score.
Just like a good marksheet can help you get admissions in top notch universities or a good job placement; a good credit report can help you get your potential loanapproved.
There are many ways to get loans and many criterias based on which you can get a loan. But all banks and other financial institutions compulsorily check your CIBIL (Credit Beureau) score. This is an established mechanism to verify the creditworthiness of the applicants. Poor CIBIL score may result in your loan getting rejected or place you in a high-risk category and thus you’ll be offered a loan at significantly higher interest rates.
Don’t worry ! With little efforts and simple strategies one can improve his / her CIBIL score and become better creditworthy. Let’s discuss and understand some easy ways to achieve this. But before that lets understand what is a CIBIL report and its scoring pattern.
Essentially a CIBIL report portrays the track record of all the past loans or credit cards with his / her name along with repayment history for regularity or irregularity. This data helps to establish the 'financial behaviour and financial discipline' of the individuals. The intent for repayment in future is extrapolated based on the available data, like Cibil scores.
The scoring pattern of the CIBIL score ranges on a point scale of 300 to 900 with 300 being the lowest and 900 points being the highest creditworthiness rating of the individual. Higher score an individual is able to garner, higher is the probability of attracting lenders to queue up to offer better deals on loans. Higher score invariably leads to most competitive Interest rate. If you understand the scoring pattern, you are on right track to follow the next few steps to improve your CIBIL rating score card.
Clearing your Credit Card balances: Clearing off all your credit card outstanding dues is a vital key to improve your rating. Plan your spending in such a manner that you are able to clear off your credit balance before the due date. This will positively reinforce your credit score. Also, it is better to have just one or two credit cards; it becomes easier to keep track of repayment.
Dispute incorrect late-payment entries: We all make mistakes. Your mortgage lender or credit card provider may also report late payments, even when payment was made by you on time. Make sure you appeal to rectify such errors. Its mandatory to address the appeal within a 30-days timeframe.
Keep good repayment history old credit card accounts: We all tend to think that we should close a credit card account which is not in use. In reality, a well-managed and good credit card account is a blessing in disguise. So, to improve creditworthiness a robust repayment track record of your credit card must be continued and held on as long as possible. The longer you hold a positive credit card repayment history the better is your CIBIL rate score.
Pay EMI’s (Equated Monthly Instalments) on time: Timely payment of bills can keep your creditworthiness intact. If you are prompt in repaying the EMIs on your credit card / secured and Unsecured Loan accounts lenders will happily lend you money. Even one late payment can hurt your score, so buck up and do everything you can to pay your bills on time from now.
30% Credit utilisation rule: Never ever use one single credit card to buy each and everything. Never exceed more than 30% of credit utilization and this will establish not only your credibility for financial discipline and financial management but will also take your CIBIL score soaring with positivity. Keeping your monthly balances low reflects a healthy CIBIL score.
Increase your credit limit-When you ask your bank to raise your credit limit, it does not necessarily mean that you get a chance to spend beyond your means. It displays the banks confidence in you. It simply means that you have a lot more credit available at your disposal, and if you keep your credit utilisation low, it will have a positive impact on your CIBIL score. That said, please ensure you don’t spend beyond your repayment capacity.
Get a secured card: Do you have a very bad CIBIL score to get a credit card? Then try getting a secured credit card. Leading banks such as ICICI Bank, Citibank, SBI, DCB Bank, Axis Bank etc. offer a secured credit card against a fixed deposit of nominal amount. If you repay your balances on time, it will give your CIBIL score a shot in the arm.
Improve your credit rating through P2P: Are you wondering how is this possible? Do you wonder about where to get money from when you have poor CIBIL score…Unlike banks, at OML P2P we allow people with no Cibil score or credit history or not so good CIBIL score to register as long as they have valid reasons for their credit history and ability to repay their loans / EMIs. Borrowing money at www.omlp2p.com is easy and convenient. No collateral is needed. In addition there are no prepayment charges. OMLP2P is a RBI registered NBFC P2P platform and thus repaying on time will improve your CIBIL score. Want to know more about how P2P lending works? Visit our website, www.omlp2p.com
By following these smart tips, you can improve your CIBIL score. A high CIBIL score indicates that one has disciplined spending and repayment habits. Thus, the banks, financial institutions, the credit card companies will offer you a higher credit limit with better terms and conditions. Hope this post will help you with improving your CIBIL score.
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