The peer-to-peer lending is on everybody’s lips, but what is it exactly and how can one benefit from it?
What is peer to peer lending?
Peer to peer (P2P) lending facilitates the process of lending from borrowers and investors by bypassing banks and affording you less hassle, higher returns for investors, and less interest charged for borrowers.
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How peer to peer lending works for you
On one hand, if you are looking for a low rate loan to start up a small business, to consolidate your existing debt, or even to begin that long overdue home renovation, P2P lending can help you achieving your goals by bringing borrowers and lenders together for a successful partnership. With companies such as Zopa, you can get a loan with rates starting from around 3.9%. Furthermore, when you sign up for a loan, you will receive a fixed interest rate far lower than any offered by the banks, also ensuring your rate never fluctuates or rises to unaffordable levels.
On the other hand, if you are willing to invest, the peer to peer lending is a more interesting option with higher interest earned than the traditional system. With Zopa once again, offering up to 5% on returns. The borrowers’ applications are controlled through the credit quality of the loan projects, Actually, lenders are put into a risk category depending on their credit history, size of the loan and specific terms, which creates very transparent investment opportunities for you. P2P lending companies use special algorithms to calculate and minimize risk. And so, you, as an investor, can also choose your risk levels according to your investment and risk strategies. Once the application is complete, you can monitor the progress of the loan or investment in real time via your profile.
Meeting some of the P2P leaders in the marketplace
With Zopa, the largest P2P lender in the UK, you can use their online instant calculator to check your rate on your loan amount over the loan period. You will then receive a quote and if you accept, you complete your application online. Lending Club in the USA is the world’s largest online peer to peer lending platform. Applying online through them, you submit the application and receive a quote straight away. Another company in the US, Prosper, works in much the same way as Lending Club with an easy online application. This offers customers a simplified and streamlined process from application right through to approval. Once the application is received, you can instantly view the loan offers that you qualify for.
CompareLend.com will help you choose the best peer to peer lender to trust with your process, whether you’re borrowing or investing. Peer to peer lending is the innovative way forward. It allows consumers more control over their money and with CompareLend.com, you can find the right match for you.