Don’t we all miss the days when people could be taken on their word? Such genuine were those times that it almost seems like a glorious but distant dream. In this age of hippocrates and falsifiers, it’s hard to argue against such stringent approaches towards money lending. Building taller fences is much more safer than having longer tables, and even more so for banks. Dubbed as the financial stalwarts of money, banks are bound to be reluctant to invest in people who are unknown to them, no matter how morally excellent an individual claims to be. This can be frustrating and even unfair at times but there’s no way you could maneuver or get around this mindset and get funded. The issues you could face when looking to borrow money from banks could be many although, here’s a few common ones.

1. Not credible enough:

Duh! It sounds just as disrespecting as foolish to an alien ear. This is an objective reason many banks provide borrowers with when rejecting their loan application. There’s no doubting that credit history is important in judging an individual’s repayment abilities, but there’s a lot to be read through in between, if one looks closely. But banks neither have the time nor are they honestly interested in learning why you couldn’t pay your EMI. Just a blip in your repayment record and just like that, you’re back to square one.

2. Your application is weak:

Age, Income, Lack of documents, No credible witnesses are a few reasons why most borrower applications get rejected in the initial stage. There’s no way your application will be even considered if this happens, even if you throw the kitchen sink at it. Improving your profile is the only option you have but there’s no guarantee that you’ll be funded even if your grass is greener this time around.

3. Willing to bet on your assets?

Strong words regarding the problems faced in acquiring unsecured loans is becoming quite a regularity these days. Banks prefer secured loans which is always a bit risky considering the irregularities in life. You might have to bet on your house, car, or something along similar lines to get a instant personal loan. The strange part is that secured loans are quite easy to get. This is a risky trade which shouldn’t be fallen for.

4. Not affordable:

Personal loans will rip your hair off” is something which everyone might have heard of. The interest rates are mind bogglingly high, some 18-20%. Salaried employees could not even think of paying these absolutely ridiculous interests leaving them stranded and nowhere to turn to. Sucks to be them but that’s the reality of the situation and borrowers have to deal with it.

5. Formalities might take ages:

Stuck in the rug procedure of keeping physical paper documents even in this digital age is somewhat cryptic on the banks’ side. Mostly this takes a lot of time and the efficiency is highly questionable. Borrowers’ have an agonising wait from the date of submission of these documents to the date of approval. There’s no fixed time scale either as to how long will it take. Provocative and controversial is the best way to sum up these issues.

Is there a way out?

There always is. Thank the Gods for short term personal loans from Peer-to-Peer lending that borrowers are not handicapped if banks reject them. Peer-to-Peer lending platforms are changing the way loans are given out by cutting out the mediator from between, which in this case are the banks. P2P directly connects the money lenders to the borrowers. This cuts out the transaction fees’ charged by the banks which helps in lowering the EMI paid by the borrowers. There’s flexibility in credit scores too meaning low credit score borrowers have someone to turn to.

As P2P lending is an online platform, all the documentation and application is done digitally, thus saving the borrower invaluable amount of time and energy. Authenticity, transparency and hassle free services are some of the many reasons why Peer to Peer lending in India is a game changer for the financial sector.