Yusra3
VIP Contributor
Peer-to-peer lending, also called P2P lending, is a way for individuals to borrow and lend money without going through a traditional financial institution like a bank. P2P platforms connect borrowers directly with investors who are willing to fund their loans.
For borrowers, P2P loans can offer competitive interest rates and faster funding compared to conventional loans. Credit requirements also tend to be more flexible. Investors benefit from the potential to earn higher returns than typical investment vehicles.
The lending process happens online through the P2P company's website. Borrowers create a listing explaining why they need a loan and their credentials. Investors can then browse listings and choose which loans to help fund based on the borrowers' credit profiles and interest rates.
Some of the largest P2P lending platforms include LendingClub, Prosper, Peerform, and Upstart. As with any loan, borrowers need to make timely payments, while investors face the risk of defaults impacting their returns.
For borrowers, P2P loans can offer competitive interest rates and faster funding compared to conventional loans. Credit requirements also tend to be more flexible. Investors benefit from the potential to earn higher returns than typical investment vehicles.
The lending process happens online through the P2P company's website. Borrowers create a listing explaining why they need a loan and their credentials. Investors can then browse listings and choose which loans to help fund based on the borrowers' credit profiles and interest rates.
Some of the largest P2P lending platforms include LendingClub, Prosper, Peerform, and Upstart. As with any loan, borrowers need to make timely payments, while investors face the risk of defaults impacting their returns.
