Peer-to-Peer Lending 101 for Borrowers and Loan Customers


For people wanting to avail of a personal loan, using a peer-to-peer (P2P) lending service or marketplace can be a viable option instead of turning to traditional institutions like banks. Being a fairly new type of alternative financing, however, the concept of P2P lending may be unfamiliar to some.

In this post, we’ll be taking a look at some of the benefits of peer-to-peer lending for the ordinary Pinoy, so that you can decide if taking out a P2P loan will work for you and your needs.

What is Peer-to-peer or P2P Lending?

For a second, let’s assume that you need to take out a loan. Most likely, your first instinct would be to head over to a local bank that you trust and complete your request.

More often than not though, problems arise before you even finish furnishing a form, such as your bank not willing to lend you money because you lack some of the requirements they need from you.

Or worse, while reading the fine print about your loan options, you discover that the interest rates your bank is going to charge you once you repay your loan are just too high.

On the opposite side of the spectrum are people who have the money. They would normally approach your bank to make a deposit. However, because of today’s increasingly low interest environment, they discover that their returns have become depressingly underwhelming.

Basically, peer-to-peer or P2P lending acts as the bridge between you and these people.

Borrowers like you can interact with lenders using a P2P lending platform like Blend PH so that you can easily request for a loan that will fund your needs. Lenders are able to see your loan request and decide if they want to loan you the money.

Why is P2P better than other lending institutions?

Also known as crowd lending, P2P entices investors because of monetary returns that are above-market. Borrowers, on the other hand, are persuaded to use such services because interest rates are often lower compared to conventional financial providers such as banks.

Because a P2P marketplace eliminates the need for a middleman like a bank, it revolves around a “matchmaking” environment, which is fueled by charging a small fee or a service charge for every transaction. This provides a better, more value-added alternative for people from both sides of the coin.

This technology also becomes disruptive in the sense that almost everyone can become a lender or a borrower while still observing a high level of credibility and security.

The Challenge of Getting Loans Approved in the Philippines

According to a 2017 financial inclusion survey by the Bangko Sentral ng Pilipinas (BSP), only about 15.8 million Filipinos aged 15 years old and above own bank accounts. What an abysmal number, given that the Philippines now has a population of around 105 million, a majority of which is powered by small and micro enterprises that show a lot of promise and continuously contribute to the country’s overall economy.

A whopping 18% of respondents in the said survey showed that they simply can’t produce the documents required to open accounts, with 10% saying the amount required to get one is too high. Some 9% of participants say that they don’t have any idea about doing such transactions and are thus left in the dark.

Suffice to say, Filipinos remain underserved by banks. Perhaps borrowers never opt to transact with these institutions because of the underlying costs and documentary requirements that are oftentimes too tasking to produce. As a result, people also get intimidated with approaching banks when trying to secure loans. Doors are automatically shut out for them if they don’t have existing accounts with these banks.

They are left with no choice but to resort to borrowing from fast cash providers or informal lenders that rip them off more often than not. What comes after is a vicious cycle of never-ending debt – a quicksand that keeps pulling them under no matter how much they work hard to try to get out of it.

How Borrowers can Benefit from Loan Products by Blend PH

Blend PH believes that every Filipino deserves the chance to loan money based on their various needs.

Given the right resources backed by a suitable partner, you can thrive and get a business idea or a potential income-generating venture off the ground.

You can be empowered to finance your personal project, maternity expenses, tuition fees, and others and pay your dues when you’re truly able to, so you can get your life back on track without fear or worry.

Applying for a loan online is fast and convenient

Transactions are typically entirely done online, which means that it is quick and convenient. This can be beneficial when you need to secure funds quickly.

At Blend PH, we make it a point to make the application process as quick and as easy as possible. As long as you complete the needed requirements (which are very minimal), you can expect fast approval from our team.

Once your loan is approved, lenders can fund it right away – which means you’ll have access to the loaned funds, fast!

Get loans at lower rates and flexible terms

With P2P lending, interest rates can be more favorable because the overhead costs often associated with the usual financing solutions are eliminated. You’re dealing with your investor through our easy-to-use platform, which is almost as good as dealing with them directly.

Repayments are done monthly based on the amount you borrowed and at the agreed interest rates, so you also learn how to become a responsible borrower.

We’re here to ensure that pursuing and funding your goal is made easier for Pinoys like you.

So, if you are a borrower who’s looking for an alternative to banks and other traditional financial platforms, consider a P2P loan platform like Blend PH that can provide you with a viable option that’s also worth exploring.

To know more about Blend PH’s loan offerings, you can go to our website and explore the available products for borrowers. Register and create an account, fill it up with your details, and get started right away.