When the tech-savvy and socially-minded Millennials choose to invest their money, it’s not surprising that peer to peer (P2P) lending is emerging as their natural financial home.
The future of finance
The FinTech collective is here to stay. That’s financial technology products for those who aren’t in the know. Chances are if you’re part of the Millennial generation, you’re not only familiar with it, you expect it, use it and value it. FinTech usage is highest among the young, relatively wealthy and urban demographic. Exposed to advances in technology from an early age, embracing FinTech comes naturally to the Millennials. And there’s no turning back. Millennials are changing the face of finance even before they take the ‘top spot’ among the demographic ranks. As well as being comfortable with pay-by-tap, the flexible and forward-thinking individuals of this generation are stepping away from traditional avenues when choosing how to invest their money. This is an independent lot. Fewer than 14% would consult with an adviser when looking to invest and skepticism towards traditional financial institutions is high. Enter peer to peer lending.
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High speed and high ideals
Millennials are ten times more likely to use P2P lending sites than the 50+. As the industry matures and awareness spreads, this is set to grow at the speed of a juggernaut. What is it that makes investing through micro-loans so attractive? P2P investing puts the lender in the driver’s seat. Investors can purchase loans on sites such as Funding Circle and Lending Club, hand picking the projects they want to support or letting technology do the work for them. Do you want to invest in small businesses that work in the environmental industry? Like the idea of helping others free themselves from debt with a great rate loan? Investing in P2P lending provides opportunities to lend in a socially beneficial way. What’s more, it makes investors out of people who would otherwise not think of getting involved. Returns can be significantly higher than yields from any savings account or high quality bonds and you can get involved in exciting projects from as little as $25 per note. Choose your risk rating. Once the loan is set up, monthly rewards start coming in.
The Millennial generation is driving a fast-paced change. They are the ones who crafted P2P lending, using FinTech, from a vision of making the financial industry better for everyone. Banks have forgotten their role as investors in the community; P2P lending puts it back on the agenda.