A growing phenomenon, peer to peer lending or P2P is a way for people to lend their money to different individuals and businesses. You being the peer to peer lender – receive a fixed amount of high interest and get your money back when the loan is repaid. This method of finance brings people together and is a way for borrowers to borrow money without having a bank involved. Here are five reasons why new peer to peer lending is the right investment for you:
1. It’s becoming global
First being introduced in the UK peer to peer lending has expanded its charm all over the world. Zopa was the first to create an official peer to peer lending platform in the world. Thereafter, being famously viewed as “banking without a bank”, peer to peer lending became famous all around the world including countries like India and China.
For instance, Lending Club and Prosper in the United States have an increased loan volume of approximately 40 times from 2009 till 2014. And because of its phenomenal increase in use, growing economies have experienced a robust rise in investors who have benefitted from higher returns.
If you are looking for a higher return than what you would’ve gotten if your money was in a bank, then peer to peer lending is the solution for you.
2. A liberal and fast financial gain
Peer to peer lending is a financing opportunity which provides permanence to those who intend to get loans. Unlike conventional banks peer to peer lending doesn’t have a requirement to show some strong reasons to borrow. Peer to peer lenders simply look for the ability to repay the debt timely and have no other demands.
In addition, because of its simple nature new peer to peer lending isn’t all complicated. Its success mostly depends on the algorithms used to interrogate borrowers and P2P’s user-friendliness. Now, these platforms have their own applications, making it highly accessible for you to access the platform from your phone or tablet.
3. Mitigated risks for investors for peer to peer business lending
What are the risks, you wonder? The primary risk is that you lose your money, which is your initial investment. However, there are some peer to peer business lending measures to help mitigate this issue. You should invest small amounts in different businesses to secure repayment from most. In addition, you should always research the company you are lending money to in order to make sure your investment is secure.
4. Peer to peer online lending is evergreen
With more and more applications and websites emerging with the aim to encourage peer to peer online lending, it is becoming easier and better to invest. With new apps, you can easily browse through the different businesses that are in need of a loan and decide on which one is better. This way you can entirely have an open choice while selecting your investment borrower. In addition to this those of you who are looking to borrow, you can avail lower interest rates.
So here you go, here are the reasons why peer to peer lending is becoming more and more efficient and famous. It widely helps those in need of loans with lower payback demands and a profit for those who lend. It is safe, growing and becoming a global phenomenon given its simple nature. Its helpfulness is widely known, and the simplicity with which it serves everyone is expanding. Go ahead and make some extra money using this well-known financing tool.