How does group-lending help in loan repayment?

Loan repayment made easier!

Imagine the hassle that borrowers undergo when repaying their loans. The tedious process, incessant reminders and un-necessary follow-ups make a simple procedure, complicated. This is where the group-lending model makes a difference. Group lending allows borrowers and lenders to transact within a community that is known to them, like friends, family, colleagues etc. With a formal procedure in place to govern the lending and borrowing process, this makes loan repayment and interest charge much easy.

Group Lending Benefits!

Group lending formulates a circle of lenders and borrowers, who know each other outside this group. This creates a comfort zone for both the parties to carry out their loan transactions. However, many a times the question arises on the professionalism of such a process. Challenges like interest rate, repayment method, tenure, late payment and related questions are a common. Nevertheless, the whole process of Group Lending is so robust that these doubts are rendered irrelevant.

The formal set up of background verification, loan agreement, fixed monthly EMIs make the process easy and acceptable to all. Group lending ensures that the borrowers get the required money at much lower rates and assures the lenders of fixed monthly repayment. What acts in favour of such a method is the fact that the borrower and lender are acquainted even out of this understanding. This is one of the reasons why peer-to-peer lending has grown considerably.

Keeping in mind the Indian context, such a set up is ideal as peer pressure exists to a great extent. This forces both borrowers and lenders to keep their financial behaviour clean. Hence chances of late payment, defaulters or fraudulent activities are minimized, automatically. Also the fact that a third party takes care of all the follow-ups on payments and documentation, makes group lending time and cost effective.

Pioneering in the field of P2P lending, i-lend provides an online platform for borrowers and lenders to negotiate and strike a mutually beneficial deal. The robust group lending model followed by i-lend enables quick and easy loan repayment, thus helping the borrowers to a great extent.