As time goes by, the number of our needs will definitely increase. It is not surprising that various institutions in the financial sector continue to create innovations to help you meet these various needs. So, examples of such innovations are peer-to-peer (P2P) lending and payday loans. These two things are often considered the same, even though there is a comparison between P2P lending and payday loans. Anything?
Get to know P2P Lending
P2P lending is an innovation in the field of financial technology (fintech). This innovation helps you get a loan for capital assistance. In P2P lending, lenders will be brought together with parties who need a loan (borrower) through an online platform.
Payday Loan, what is it?
Now let’s move on to payday loans. This loan is a short-term loan. As the name implies, a payday loan is a loan offered to borrowers who need funds, but the time for disbursement of salaries has not yet arrived. The borrower is required to pay off the borrowed funds when the salary disbursement arrives.
Both P2P lending and payday loans are short-term types of loans, so many people think these two products are the same thing. However, is that true? Come on, get to know the difference between P2P lending and Payday Loans.
Comparison of P2P Lending with Payday Loans
As previously mentioned, P2P lending and payday loans are short-term loans. However, they are operationally very different. It should be emphasized again that P2P lending is an innovation in the fintech sector, while payday loans are not. Payday loans are an industry in themselves that are not included in fintech.
In addition, although both are short-term loans, their maturities are different. For P2P lending, the borrowing period is around six months with a minimum tenor of thirty days. This is different from a payday loan which has a maturity of only one period, namely when the salary is disbursed.