Difference between p2p and Private Lending

1. The payment method of funds is different: for P2P, it belongs to the intermediary between borrowers and lenders. Most of its funds come from lenders. When the borrower is overdue or other circumstances occur, the platform will advance this part of the funds and then recover from the borrower. The pool of funds for private lending belongs to itself, and there is no problem in paying it yourself.

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2. Loan repayment interest is different: p2p loan interest is generally higher than that of banks, but the interest rate is clear and there is no usury. However, private lending is different. Except for acquaintances between relatives and friends who borrow money, the interest rate of loan companies is often higher than that of p2p, and the calculation method of interest is more complicated, and even usury may occur.

3. Different ways of lending: Private lending usually occurs between acquaintances and relatives, which has a small choice and certain limitations, limiting the flow of funds. P2P financing lenders and borrowers have a wide range of choices, which expands the scope of capital flow and reduces the idle time of funds.

4. Different borrowing methods: most private lending agreements are in oral form, and the written form is just a simple "receipt or loan". The contract is incomplete. Once a dispute occurs, it is difficult to prove and identify, and the interests of creditors cannot be guaranteed. Strict legal documents are signed for P2P financial management, and there are clear legal agreements on the transfer of bank funds, the return of interest and the liability for breach of contract. The contract is complete and the procedures are legal. Even if there is a dispute, it can ensure that the evidence is easy and sufficient, and ensure the legal realization of the creditor's rights.

5. Different security: Private lending is limited by the credit level, social experience, legal awareness and professional ability of the parties, and the operation process is not standardized, so there is often a risk of default, and the funds will go back. The risk control mechanism of P2P financial management is relatively perfect and standardized, which fundamentally reduces the risk of default and ensures the safe operation of lending.