Business owners don’t let money to be static. They invest, earn, spend it. Finances always are in movement. One of possibility to invest and take a loan is Peer-to-Peer.
P2P lending (also known as social lending or crowdlending) is a method of debt financing that enables individuals to borrow and lend money without the use of an official financial institution as an intermediary. Peer-to-peer lending removes the middleman from the process, but it also involves more time, effort and risk than the general brick-and-mortar lending scenarios.
Traditionally, business owners submit applications for the loan from bank, funds or are looking for investors. With P2P loans, you can invest in borrowers with good credit ratings and bad credit ratings.
Some countries has P2P platforms when one side can find other side. Platforms connect the public to businesses in need of funding.
Forbes says that P2P lending takes 2nd place in a list of the best investments to make in 2018.
Some advantages of Peer-to-Peer lending are
- Easy, fast online application process and easy to open an investment account online
- Lenders can be individuals or organization
- Lower interest rates compared with banks
- Loans available for most of your needs
- No hidden fees in monthly payments and fixed interest rate
- No prepayment penalty if you have possibility to pay off the loan earlier
- You don’t have to provide collateral such as house or car. Loans are unsecured.
- The initial investment is low
- You can invest in many loans because number is not limited
- You can reinvest the payments you receive or withdraw the funds from your account
Have you ever tried P2P lending?
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