Peer to peer lending is a platform where one person borrows money from another person without having to follow the traditional process. There are a lot of individuals who would like to invest but they are scared off by the bureaucracy involved. P2P investing provides such people with a chance to invest. Peer to peer lending has a lot of benefits to both the lender and the borrower. In this article, we will discuss some of the benefits of investing in P2P lending.
The first benefit of investing in peer to peer lending is that the initial capital required is low. Many investment opportunities require a lot of money as the initial investment. This prevents a lot of potential lending club strategies from optimizing the use of funds. Lending Club on the other hand provides an opportunity where you can invest as little as $1,000. This gives people a chance to test the waters by investing a small amount at first. For instance, you can invest in peer to peer lending with a small number of loans. You should read lending club investor reviews to learn how much you can make peer to peer lending. There are certain strategies you should follow to help ensure a good return on your investment.
It provides a better alternative to saving your money in a bank. Keeping your money in a savings account can only get you 1%-2% return on your total investment. This even includes putting your money in a fixed income account where you can only access it after the expiration of the agreed upon period of time. Lending Club provides you with a much better way to grow your money. Depending on the platform you are using, peer to peer lending can even give a return rate of over 10%. Although there are some tricks involved in this kind of investment, the many benefits outweigh such shortcomings.
With P2P lending, you get to decide whether to withdraw your money or reinvest it. After getting your money back together with the accrued interest, you have the opportunity to reinvest it or withdraw it for use. This is not common with most investment. Having complete control of your money is one of many reasons why peer to peer lending has seen rapid growth in recent years. You might want to check this website at http://www.encyclopedia.com/social-sciences-and-law/economics-business-and-labor/money-banking-and-investment/finance for more facts about finance.
Strategies that are effective for a lending club investor can provide you with a chance to earn passive income. Most people depend on only one source of income which may seem normal in our society but is it otherwise extremely risky. You can find yourself in a very difficult situation if that stream of income was to be cut off for any reason. P2P lending provides you with a chance to diversify your stream of income.