The global peer-to-peer (P2P) lending market is expected to reach a value of $897.85 billion by 2024. The reason for this rapid growth is the ease and efficiency of taking loans on P2P platforms that bring together borrowers and investors. Traditional banks, with their often complex and lengthy lending procedures, are removed from this arrangement. Popular P2P platforms like Lending Club use your credit score, credit profile, income, and the amount and term of the loan to approve or reject loan requests. But most platforms only approve loans once P2P investors commit a minimum level of funding.
Also, borrowers turn to P2P platforms because they can often get lower interest rates compared to banks. These platforms could even approve loans for borrowers with bad credit and are less restrictive with the purpose of the loan.