Peer to Peer lending means borrowing money from individual investors, where the “lender” is a facilitator for the loan.

It is facilitated by a lending platform that connects borrowers with investors.

The investors gain a fixed income asset class that can yield better returns than other investment options, by lending their money in this way.

Peer to Peer providers enable the lender to invest in a portfolio of consumer loans and investors can earn interest, on what they lend and the borrowers are given an individual rate, based on their credit score.

Borrowers can secure loans at generally lower rates than those offered by banks and applications are speedy and administered online.

Peer to Peer provide a higher return on funds than compared with other investments however lenders need to be aware that there is no government backed guarantee on the funds that they provide.

If you are considering becoming an investor, check the website of the provider and they should have a credit licence, listed on the bottom of the page and also look into which banks or services they are connected to.

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