Blockchain P2P Lending Platform- What is the impact? How does it work in real-time?

Blockchain.Cryptocurrencies. The roar of the digital age investors and entrepreneurs!

Many giant sectors like finance, e-commerce, healthcare, the supply chain have already succeeded in incorporating blockchain into their processes. The lending platform is one of the budding areas at which this DLT is stamping its footsteps right now. 

Leading financial brands have started their blockchain P2P lending platform development to expand their business across the globe. People may find it hard to believe in P2P lending, but sure the freedom of borrowing without any past credit score may be the glass of wine!

Now, let’s get into the areas of how P2P lending platform can be beneficial, and it’s processing!

Benefits of Blockchain P2P Lending Platform

The traditional lending process from banks and central authorities require highly valuable collaterals, appropriate credit score, and much more documents. Every start-up requires ample time to generate revenue and repay debts. But, this practical difficulty can affect the credit score protocol in banks. Hence, the P2P lending platform shatters these credit score or collateral-based lending process. 

The areas at which the P2P lending platform can be useful are:

Consensus ROI

All over the world, distinct countries follow different rates of interest. Instead, a decentralized blockchain P2P lending platform can fix the legitimate rates of interest. The automated smart contract protocols can set interest rates based on the credibility of the borrower.

Processing Time

P2P lending platform can avoid intermediaries and hence reducing the processing time. Smart contract protocols may be designed in such a way to verify the collaterals of a borrower with the existing database. 

Cutting-off employment charges

P2P lending avoids loan officers, bankers, auditors, and other intermediaries. Hence, the salaries, allowances paid may be effectively reduced. Lenders can reach borrowers directly and resolve their disputes. 

Now, let’s analyze how this wondering P2P lending platform process works!

How Blockchain P2P Lending Platform Works?

Let’s go through the P2P lending process step by step!

1. Lender registers:

The lender who is ready to invest in the P2P lending platform with the desired interest rates can register as the user with the necessary details. Depending upon the client requirements, the P2P lending platform can be developed with the following criteria for the lender registration.  

• Name, Age, Contact Info, 
• Type of investment,
• Jurisdiction Authorised ID Proof,
• Bank account information,
• Desired credibility range,
• Preferred risky investment range,
• Tenure and other teams.

2. Borrower registers:

The borrower who wants to lend money in the P2P lending platform signs up the user account with the required details. Here is the necessary information that is opted while borrower registers on the platform.

• Personal information,
• Authorized Collaterals,
• Repayment sources,
• Guarantor info,
• Government-approved ID Proof,
• Tenure,
• Preferred interest rates.

3. Borrower quotes the loan request:

On registering as a verified user in the P2P lending platform, a borrower submits the loan request in the market place or browses for the existing quotes. Smart contract protocol allows the borrowers to send load requests only for the investors who desire to make such kind of investments. 

4.The lender looks for the preferred investment:

The lender receives a bunch of quotes for the loan approvals from borrowers based on the investment interests. If the lender is satisfied with the borrower profile and interest rates, he can proceed with a meet. 

5. Lender schedules a meet:

The peers meet each other offline or online and then discuss the loan principal, repayment, interest rates, and much more. On satisfying norms, lender and borrower sign up the deal with smart contracts. 

6. Smart Contracts and automated repayments:

The owner of a P2P lending platform can decide about the smart contract protocol regulations and rules. Based on the credit score of the borrower on the P2P lending platform, the smart contract can fix interest rates on the loans. 

Else, the investor can set interest rates based on the risk level of the principal amount. The three basic levels of investments are low-risk, medium-risk, high-risk. If the lender proceeds with low-risk investments, he can afford lower rates of interest. 

P2P lending platform can also be designed with fixed rates of interest-based on the client requirements. Smart contracts can also include the credit card or other auto repayment options from the borrower. 

Over to you

Blockchain P2P lending platform development process can be completely customized based on the client requirements. With the top-notch match, engines generate perfect lender, borrower pairs and serve the financial need of the world!

To know more on the P2P lending platform, tap us on live chat or telegram!