Peer-to-peer lending: What you should know before you invest

But why invest in P2P lending, rather than your bank?

1: You’re in control of your investment

2: P2P Lending is Flexible

Here’s how lenders make a profit…

  • P2P Lending platforms will often categorize borrowers as low risk, medium risk, and high risk — with interest rates that reflect this. Constant, on the other hand, doesn’t have to — all loans are over-collateralized, meaning borrowers put up 150% of the loan amount in collateral to secure the loan.
  • That means interest rates go as high as 10% (as of 7 Jan 2020, the market rate is 8%), sometimes even higher, without the lender worrying about calculating risk for each loan.
  • If a borrower defaults, we sell the collateral to repay the lender. The same applies if their collateral falls in value too much.

Sounds good, but what are the risks with P2P Lending?

The Takeaway.



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Peer-to-peer lending built on peer-to-peer technology. Refer & Earn $10 | Website