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Invest in other people’s loans – Peer to Peer Investing (P2P)

Have faith in other’s ability to pay off loans? Take advantage with Peer to Peer Lending options. Quite simply: Invest in other people’s loans. This can be done through multiple solutions including, Lending Club and Prosper. With these two options, you’ll be able to see a wide array of loans with the lender’s ranking (credit rating) and the return on investment. Typically these are decent investments because you can invest in different portions of loans, like investing $25 in one loan and, another $25 elsewhere. The lower the credit rating, the higher investment return, but also the greater risk.

peer to peer investing explained

Prosper

Prosper is still a great place to find these types of loans to invest. A typical investment only takes $25, and you can test and play around with other investment options.  Also a great place for taking out a loan!

Lending Club

This option is geared more towards the loan side of the peer to peer investing. There are several options for borrowers including Small Business.

Which one should you use?

Both options are reputable when it comes to the P2P side of things, but if you prefer to help people with their projects, educational pursuits, and a bit more personal touch Prosper is the place for you. If you prefer a wider selection of both borrowing and investment options, Lending Club is the solution for you.

The other alternatives

There are several Peer to Peer options starting to open, given that the lender comes from people themselves and not banks. Here are some other options:

Real estate also offers a similar investment opportunity with Peer to Peer Mortgage Investing.  You’ll find more info here.

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Founder of MoneyHax.com, a website that finds unique ways to find value in your everyday life. Father of two young children and a devoted husband to a Nurse. Also, a fan of Star Wars, Leslie Nielsen, Reddit, and Changing Diapers.
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