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Person to Person Lending – A New Phenomenon

Wednesday , 10, November 2021 Comments Off on Person to Person Lending – A New Phenomenon

The person-to-person lending movement (or P2P, as we'll refer to it) is about matching people with money to invest and those who want to borrow money. You can also invest in peer 2 peer lending through https://crowdfunding-platforms.com/.

This creates a mutually beneficial agreement. Both parties will often find the rates much better than they would have at any bank. Lenders and investors typically earn between 9%-20%. Similar rates are found by borrowers.

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Because the loan is short-term, it can be used as an investment vehicle. Usually, it lasts no more than three years. No P2P lending institution offers home loans.

This growing trend has prompted many companies to be set up. Prosper Marketplace is the pioneer, and Lending Club is the other. Both have been great. Lenders can browse through the loan applications to determine which ones they will invest. 

P2P lending is becoming more popular. This industry offers investors better returns than CDs or the stock market. Many choose to invest in it. Personally, I like the idea of earning income each month from the interest I earn on my loans.

P2P lending is already gaining a solid foothold in the credit markets. It is estimated that the industry will double in the coming years, with $4 billion already in loans. As credit markets tighten lending, people will continue to turn to this industry for their financial needs.