By Newt Felix
If you are in the market looking to buy a personal loan, it is highly likely that you have come across myriad options. With the advent of the internet, there is more information flow and consumers now have even more choices of loans. Whether you are looking for a secured or unsecured loan, there are more innovative products powered by the internet. One of these is peer-to-peer lending.
While there is a lot of information available online, this loan is still unclear to most consumers. Like with any financial product, it is important to first understand everything about peer-to- peer (P2P) lending before opting for the same to fund your financial needs. Below is a short breakdown to help you make an informed choice:
Peer-to- peer in Brief
P2P is also called social lending and it lets two people to lend and borrow money from each other. The idea is to remove middlemen in the lending process just like other internet services have done. The two parties will opt for this type of lending and borrowing to leverage the benefits and it is covered by the Financial Conduct Authority (FCA) regulations. This type of lending has been facilitated by increased interconnectivity through the internet. P2P platforms are used to connect the lender and the borrower and also maintain security to protect all parties.
Benefits to the Borrower
Due to the ease of connectivity, there are many benefits of P2P lending and it is no wonder the trend has spread fast. This has become one of the main competitors to traditional lenders and for many good reasons. Here are some reasons borrowers are opting for P2P:
Benefits to the P2P Lender
As a lender, you can leverage the growing need for funding to get good returns. Some of the reasons to invest in P2P lending include:
Newt Felix is an online financial consultant working in Miami. He has worked in financing for over 17 years and is an authority on emerging financial services. He also writes on trends in the industry such as peer-to- peer lending.