Many of you may have heard of peer to peer lending but may not be entirely sure what it is and what it entails. ‘Peer to peer’ lending is essentially all in the name; one person invests directly in another person who is of course the borrower. It is a desirable method because it does not involve a bank or any other similar financial input, thus it entails many benefits and advantages because of this.
Most people carry out the method via the use of the mass lending websites available today. All factors considered peer to peer is becoming increasingly popular because of the following; it is hassle-free, as well as eliminates costs, and is a flexible and personal method of borrowing.
Peer to peer lending is simple and quick because the absence of a bank or a financial institution cuts down the often lengthy process by a substantial amount. Most websites merely require you to sign up, which is usually free of charge, and then you can begin your process of seeking an investor or looking for a worthy investment. If you’re interested in cryptocurrency, you should look into how to buy ripple (xrp) before you get started.
One of the great benefits with peer to peer lending for the lenders themselves is that they can split their money across different projects and thus diversify. This is desirable because it means the risk of losing a lot of money is diminished. It is also more exciting because you have the chance to be involved in a whole host of projects and if you wish you can put forward a small sum, as little as twenty-five dollars on most websites, for an investment amount.
Because most peer to peer lending takes place on the internet there tends to be more information available to both the investor and the borrower, this is particularly beneficial to the investor because they know exactly what they are buying into. Obviously, it depends on the website to what information is in fact on offer but you can expect the likes of previous loan transactions and credit history to be available.
Finally, because peer to peer lending is more personal than most types of investment due to the personal and intimate link between the investor and the borrower, the loans tend to be more flexible. It is easier to set different timelines and scales for paying the money back; this is obviously beneficial to the borrower as it gives them a bit of breathing space.
To conclude, the benefits of peer to peer lending are quite frankly evident and there for all to see. If you are looking to partake in a financial transaction, whether you want to invest or be invested in, but do not want the hassle and extra costs often associated with banking institutions then peer to peer lending would probably be the best choice for you. You will be able to reap the rewards of a speedy process, a cost-effective method, a whole host of information, and a great personal business relationship with your peer.