5 Reasons to Choose Personal Loan Over Peer-to-Peer Lending

While preferring to opt for loans to finance one’s needs, a common question that occurs to most individuals is, which form of credit will offer me the most returns at the most reasonable cost? Not all forms of credit are made equal and not every product might be the right fit for your requirements. However, the good news is that the borrower of today has more borrowing options as compared to before. Personal loans and peer-to-peer lending are attractive methods of borrowing, but which option should you opt for? Let’s understand the meaning and the difference between Personal loans vs peer to peer lending:

Personal Loan

A personal loan is a collateral-free form of finance that is offered by financial institutions. These funds can be used to fund any of your requirements. The funds are sanctioned as per your eligibility and must be repaid within a fixed tenure as per the terms and conditions in the loan agreement.

Peer to Peer Lending

Another attractive type of borrowing that might be relatively new to most borrowers is Peer-to-peer lending better known as P2P lending. A major difference between both is the fact that P2P lending enables the borrower to borrow directly from individuals without the requirement of a financial intermediary. These types of loans, in most cases, are offered online and are approved quickly.

If you are considering opting for a personal loan online, here are some reasons why you should consider opting for a personal loan:

• Quick Sanction and Approval: Receiving funds without delay during emergencies can prove to be a lifesaver. This is why, at SMFG India Credit, we have designed our operations to ensure that you can get your hand on funds when you need them the most. When you make a loan application, it is processed quickly and if your loan is sanctioned, the funds are credited to your account within 30 minutes* of approval.
• Reasonable Rates of Interest: We, at SMFG India Credit, offer loans at reasonable rates of interest and offer flexible repayment tenures to ensure that you can continue to repay your loan within your budget. Loans for both, salaried and self-employed professionals are offered at a rate of interest starting from 13% per annum.

Must Read:7 Situations in Which a Personal Loan Can Be Your Saviour

• Collateral-Free Borrowing: Personal loans are unsecured loans and hence you are not required to mortgage any of your assets while opting for a loan.
• Flexibility is using Funds: The funds borrowed can be used for any purpose. Personal loans are also useful to meet multiple varied requirements, as well as debt consolidation.
• Loan Limit: You can borrow funds up to Rs. 30 lakhs based on your eligibility from SMFG India Credit. Our personal loan eligibility calculator can help in estimating the amount you are eligible to borrow for a given interest rate and tenure. Opting for a personal loan might be the best option in case you need to opt for a higher loan amount.

Can I Apply for a Personal Loan?

SMFG India Credit’s personal loan eligibility criteria are as follows:

• Candidates between 21 to 60 years, both self-employed and salaried can apply for a loan for funds to cater to their requirements.
• Applicants should earn at least Rs. 25, 000 in metro cities like Mumbai and Delhi and a sum of Rs. 20,000 in other towns across India.
• The applicant should have worked for at least 1 year in total and a minimum of 6 months in the company that they are presently working for. 
• Self-employed persons should earn a basic minimum net profit from the business depending on the trade they are engaged in.
• A CIBIL score of 750 and above is required, with a good credit history. 

In addition to these factors, we also consider other factors like your repayment capacity, nature of employment, etc. while evaluating your application for a loan.

Must Read: Reasons Why Borrowing Money from Friends is Not a Good Idea

What Documents are Required to be Submitted as a Part of the Application Process?

The following are the basic personal loan documents are required to evaluate your eligibility for a personal loan:

• The last 3 months’ salary slips are required to be submitted as Proof of Income by salaried applicants. 
•  Self-employed professionals are required to prove their income by submitting income proofs. 
• PAN is mandatory
• KYC documents such as your Voters ID card, AADHAR Card, etc.
• Bank statements of the past 6 months
• Signature proof such as Passport copy, PAN copy, etc.

If you have decided to opt for a personal loan, click on the “Apply now” button on this page to commence the loan application process. Happy borrowing!