PEER TO PEER LENDING
Peer to Peer Lending
I love the idea of Peer to Peer Lending (or P2P Lending). It allows you to use a website and lend money at better terms, instead of having to pay the high-interest rates of a bank. You shouldn’t borrow money to help you with debt, it won’t make you any good in the long run. But if you need a personal loan, the P2P lending system can help you save long money in the process.
For potential investors, returns are risky but a lot higher than any other options available in the market. You can earn from 6% to 18% returns of your investment. There are several services online offering P2P lending, let’s have a look at my favorite ones.
Lending Club: Even if Lending Club was not the first website offering P2P lending, I consider it one of the best websites for this kind of financing. It gives its investors the possibility to trade loans with other users, just like with any other financial service.
Underwriting the loan has become better regularized and simpler. If you notice a change in a borrower’s crediting score you can flip loans or cut your losses. Go To Lending Club
Prosper: Prosper is the company that started the idea of P2P lending and brought it online. Some aspects are still in the working process. For example, in the beginning, investors couldn’t know when a loan was going bad. Today, the company is taking action to get better at that. Prosper is available in more states than Lending Club, which makes it slightly more accessible.