Decentralized Peer-to-peer lending platform is a completely free market environment which holds all the elements that is required by a credit business to function. Borrowers and lenders will get a perfect loan marketplace to interact directly in a hassle-free way. Blockchain and smart contract are the key which makes the P2P lending platform more trustable and secure. Blockchain makes the process transparent and smart contract automates the loan payment process.
Osiz Technologies is a top-notch blockchain development company having all the resources required to develop a peer-to-peer lending platform over blockchain. Get the most advanced P2P lending platform with smart contract to allow your users to lend and borrow money extremely faster with no intermediary while reducing the additional costs.
Implementing blockchain for lending platforms will allow the smart contracts to execute the process and both borrowers & lenders will no longer need any trusted third party to deal with each other. They easily interact with each other through blockchain platform, in a secure way.
When the smart contract system is combined with the existing traditional lending process, the borrowers and the lenders will be benefited. The process will run smoothly without interruption and eliminates the possible errors. So it becomes a platform where the users experience trusted & secure lending process.
In the decentralized platform, the lenders can remain anonymous and they don’t have the need to show their identity anywhere other than initial registration. They have to just select their preferred loan type from the marketplace and initiate the lending process straight from their wallets
Firstly, the lender will have to create a profile with basic information like name, address, ID number, bank details, type of investment which a lender wish to make (business or personal loan) and criteria like interest will be set up. The completed profile will be submitted to the marketplace where lenders and borrowers could find each other.
When the lender account is successfully created, they will have to wait until they get the loan requests from the borrower. If the lender receives any request from the borrower, the lender can schedule a direct interview with the borrower according to their convenience.
Just like how a lender created account, the borrower also has to create an account to view the lender. A borrower has to setup an account with the personal information including name, address, government-approved ID and collateral like cryptocurrency, legal documents and a 3rd party guarantor.
Next to creation of account, the borrower can now send a loan request to the lenders all over the world. This is made possible with smart contracts, which allow the borrowers to send the requests to the lenders who wishes to lend money for the investment which a borrower wants to make.
When a lender receives the loan request from borrower, the lender will interview the borrower before lending money. The following questions will be basically asked during the interview based on which, the lender either approves or rejects the loan application.
If the lender approves the loan application, smart contract plays a major role in fixing the rate of interest for different types of borrowers by checking their creditworthiness. The borrowers can be divided based on their repayment rates such as high-risk, medium-risk or low-risk. Low rate of interest is set for a low-risk borrower having good repayment rate, and vice versa.
If the lender accepts the loan application and informed about the rate of interest and other terms, the lender send loan amount to the borrower. The lender can send the money from their wallet to the borrowers wallet and the borrower becomes liable to repay the loan promptly.
Finally, the borrowers make payments via smart contract induced with crypto wallet. If a borrower fail to pay any installment, smart contract will add the late fees to the actual amount and update the ledger timely. And if the borrower pay the loan promptly as per the terms, smart contract would deduct penalties automatically.
Having strong knowledge on blockchain enable us to deliver successful blockchain solutions to our peer-to-peer lending platform clients. If you want to develop your own peer-to-peer lending platform on blockchain at an affordable cost, Osiz would be the right choice. Hire our team of highly talented blockchain and smart contract developers to build your P2P lending platform with advanced smart contract functionalities.