Changing investment market has brought users a plethora of options to grow their money. Now you can invest your money in a fixed savings account that gives you a considerable fixed gain, or go an extra-mile and reap benefits from Peer to peer lending. It is a comparatively new investment concept that offers lender with a higher interest rate, and several other gains without compromising on the liquidity of investment. Several multi-national firms are also introducing Peer to peer lending platforms whereas lender you can lend to a selection of pre-verified borrowers online.
Why Peer to peer lending?
Peer to peer lending is an effective fixed income investment which offers investors similar returns as an equity portfolio but much less risk compared to an equity investment. The platform assesses credit worthiness of the borrower and only verified borrower profiles are available of lending on the platform. By lending small amounts to a number of screened borrowers, the lender is able to significantly reduce the investment risk while generating superior returns. It is helping a lot of professionals generate additional income with putting in many efforts. All that one has to do is sign-up on the platform to receive verified borrower profiles and get access to possible lending opportunities.
- Benefits of Peer to peer lending over savings account:
Unlike usual savings account, the interest rate for Peer to peer lending is much higher and the money is returned periodically over a defined time-period. Only relevant borrower details are disclosed and privacy is maintained. The transactions are carried out through secured network to ensure no confidential information is leaked.
- Risks involved in Peer to peer lending
A lot of people are interested in generating recurring lending income but due to lack of sufficient information, people find it difficult to trust the borrower and take a leap of faith. But through Peer to peer lending platform lenders can rely on the expertise of the platform to do the necessary diligence for them. It is a boon for people with smaller income, and those looking for safer investment options.
All in all, it is clear that Peer to peer lending is a superior investment alternative compared to savings account deposit – in terms of returns, liquidity, and portfolio diversification. It also provides the investor with added benefits of reduced investment risk, self-investment decision, ease of investment and the chance to make multiple investments at once. The biggest advantage of investing in this platform which makes it a winner is the limited time requirement and the professional help available to generate greater returns, which is a boon for every investor.