P2P lending or peer to peer lending is a new term which relies on small individuals. P2P lending aims to remove the banks and financial intermediaries from in between and make lending a simpler process. It makes lending just a matter of few hours.  All you need to do is fill the form online and another individual who wishes to lend money can choose you to earn extra money.

It links borrowers with these lenders over an online platform such as LendBox or FairCent in India circumventing the need for a bank. With the banks becoming hesitant to give out loans to individual for the purpose of setting up new businesses in an era of global economic slowdown, this lending system has really come in handy. Since, P2P carries interest rates and repayment clauses, it is also called debt based Crowd Funding.

In USA, P2P lending has increased by 84% every quarter since 2007. This shows the growing demand. Now this trend has started to pick up in India too and more and more people are bound to opt for these websites instead of traditional borrowing methods. There are banks and institutional investors which are also thinking of entering this market and are working on it. According to PWC $150 billion is the amount of business expected to be done by 2025 on these platforms. RBI is looking to regularize these lending platforms and bring it under their ambit.

Consumers have the need of getting a more streamlined and simpler process for getting loans and more returns for their money and P2P sites are capitalizing on these websites. This growth of these sites have brought them under the notice and led to creation of buzz around this term. P2P has immense opportunity not only in personal loans segment but credit card debt, auto loans and mortgages. This can change the way we bank.