Peer-to-peer or P2P lending is the practice of lending money to unrelated individuals, or "peers", without going through a tradition financial intermediary such as a bank or other traditional financial institutions. This lending takes place online on peer-to-peer lending companies' websites using various different lending platforms and credit checking tools.
It allows individuals to secure relatively large loans without getting a bank involved.
Most peer-to-peer loans are unsecured personal loans, i.e. they are made to an individual rather than a company and borrowers do not provide collateral as a protection to the lender against default. Business loans are offered by some companies.
This is a risky investment however you’re compensated for this risk by earning very high interest rates.
A good site for this kind of investment are Prosper and Lending Club (U.S. Residents Only) both are located in San Francisco, California.
Peer-to-Peer Lending Lures Investors With 12% Return.
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