With several loan products available in the market, choosing the right one can be challenging. This is why doing ample research before settling on one instrument can go a long way. Now, whether it is a big-ticket purchase or an international trip, you can finance your expenses either by:
- Borrowing a personal loan from a lender
- Opting for peer to peer (P2P) lending
But before you make your choice, let’s take a closer look at the two products and their differences.
Personal loans vs peer to peer lending
Personal finance is your go-to option during a financial crisis. This is because it is an unsecured credit that doesn’t require you to pledge any collateral. And unlike other loan products like car loans and home loans that can only be used for their specified purpose, you can use personal finance for multiple purposes. Moreover, many lenders have relaxed personal loan eligibility criteria, which is easy to qualify for.
On the other hand, peer to peer lending is a relatively new finance option that involves borrowing funds directly from an individual. Simply put, it doesn’t involve any intermediary or financial institution. Also, one big personal loan vs peer to peer difference is that P2P loans are primarily available through online platforms.
Additional Read: RBI’s New Guidelines for P2P Lending Platforms
Reasons to opt for a personal loan
If you are still struggling to pick between peer to peer lending vs personal loans, here are a few advantages of the latter.
- Instant disbursal
If you are going through a financial crisis and require funds urgently, personal finance is the way to go. After checking your eligibility, the application, approval, and processing of the loan take little time compared to P2P lending. Hence, you get the funds in your account instantly.
- No collateral
As mentioned above, you don’t have to pledge collateral to borrow a loan for personal use. Thus, you can avail of the loan without putting your personal assets, like cash deposits, on the line.
Today, many lenders provide tailor-made loans that can be moulded according to your financial requirements. Thus, you can find customised repayment schemes that make it easier to pay off the loan amount. What’s more, you can use the funds for various expenses, making the product convenient for diverse financial goals.
- Higher loan limit
Personal finance options give you a higher borrowing limit over P2P lending, which only allows you to borrow a small loan amount. If you have a spotless credit history or a high monthly income, you can easily get a higher loan amount with personal finance.
Additional Read: You Can Still Avail a Personal Loan With a Low CIBIL Score!
Over to you
Decided on personal finance? If yes, all you need is a reliable lender like Tata Capital. We offer loans customised to match your financial obligations and expenses. With our personal loan interest rates starting at just 10.99% and flexible EMI repayment options, you can enjoy a stress-free borrowing experience.
Furthermore, you can borrow a loan through a simple online process and enjoy a flexible tenure of up to 6 years. So, what are you waiting for? Reach out to us by logging on to our website today!