Secondly, the P2P platform can generally provide investors with higher returns, mainly because there is no need for physical outlets like banks, and the operating costs are reduced. Of course, the corresponding return to investors is also higher.
In addition, ordinary wage earners and small and micro enterprises are now "losing money" in bank loans: on the one hand, bank loan conditions are stricter, and qualifications are generally difficult to meet bank requirements; On the other hand, even if they meet the requirements, the approval process of bank loans is complicated and takes a long time, which can't solve their demand for quick financing in a short time. P2P online lending platform has the advantages of high speed, simple process and low threshold in approval and lending, which greatly improves the loan efficiency and solves the urgent need for people with loan difficulties. Therefore, high interest rate can be regarded as the "price" paid by lenders to understand the urgent need.
As mentioned earlier, the annual interest rate of P2P online lending platform is generally 8%-20%, which is much higher than the bank interest rate, but this range belongs to the normal and rational interest rate range of P2P industry. For example, Jinrong Institute's annualized interest rate 14%- 17% is within the reasonable interest rate range of the industry. It is with such high interest and high income that P2P, a rookie, can quickly occupy a place in the field of investment and financial management.
However, if the interest of some platforms exceeds this rational range, or even reaches more than 30%, then there is a high risk in this part of the platform. For this part of the platform, Bian Xiao suggested that investors should be cautious and must not blindly invest for high returns and eventually lose their principal.