Peer-To-Peer Lending: how to make the most out of your savings

Choosing an investment can be very confusing and, eventually, frustrating. There are so many options out there that it is natural to feel a bit overwhelmed about the whole thing. Peer-to-Peer lending is a practical way to get started.

It is very important to start planning your financial future as early as possible, so the best thing to do is to put your savings to work in an easy, safe and short-term way. Peer-To-Peer lending is the best way to do that.

How It Works
There are many platforms that allow users to borrow and lend money without the use of a bank. This method, usually known as Peer-to-Peer or P2P is gaining popularity among investors all over the country and it’s really easy to understand why.


P2P platforms allow the user to set up an account, as an individual or an institution, and determine whether you are seeking to lend money or to set up a retirement fund. 
By lending money, you will be helping out a peer that doesn’t want to borrow from a bank and, in return, you will get your money back plus an interest rate that can be a higher than any other short-term investment option. And if you are willing to take some more risk, you can make even more money.


Popular Sites
There are many websites that will allow you to become a lender. The most popular is Lending Club, that went public in 2014 and skyrocketed to the FinTech hall of fame. It is available in 39 states and allows users to lend up to $40,000.


Prosper is another popular site that allows you to get started with as little as $25. It offers the possibility to build a portfolio and they claim to have high quality borrowers.


Upstart is a P2P site that, unlike the other two, it is only available to accredited investors. This platform uses artificial intelligence to determine the quality of borrowers and interest rates range from 7.8% to 29.99%.


The one thing you need to keep into account when it comes to P2P lending is that money is taxed as a regular income and not as an investment one, so taxes will be a little bit higher. 

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