Peer to peer is translated into Spanish as “from by to by“, so the p2p lending it is interpreted as a loan between pairs; that is, between people with the same conditions, and it is a new way of asking or to invest money.
The platforms that exist from p2p lending serve as intermediary among those who need money for a specific project and those that have money to invest it in that project, in exchange for an economic benefit.
Users who need money for a specific project they request it through the platform, which makes a profile of risk of the client and then package several viable projects in a kind of virtual portfolio. Users interested in to invest in these projects, in exchange for a gain, deposit money in that portfolio to be able to finance them.
How did the p2p lending?
Zopa was the first firm to start operating with this model in the United Kingdom, in 2005, however currently the largest intermediary of this type is Lending Club, in USA with almost 120 thousand loans for 1.5 billion dollars.
What advantage have the p2p lending?
Platforms p2p lending eliminate the role of banks which would normally be the lenders.
The main advantage is that users who request loans pay interest rates lower than they would pay in the traditional market, while the investors receive a higher performance what if they saved in others financial products.
Platforms p2p lending they keep a quota or a part of the margin of the loans.
So, loans between individuals are an accessible form of investment. I mean, you can win money lending money to other people through platforms on the Internet.
P2p companies using financial technologies (fintech) can operate with general expenses lower compared to financial institutions traditional. This translates into cheaper loans and investments with better returns.
However, these loan and investment platforms are relatively new, and therefore, you should take into consideration several factors before to invest in some of those that exist in the market.
Benefits of Peer to Peer Lending to Save Your Money
According to Kubo Financiero, with this scheme, p2p, you could to invest the money that you want to save on entrepreneurial projects so that, after a certain time, you can increase the total of your original capital. “This with the satisfaction of having supported several projects that you yourself will have selected.”
1. Transparency: As an investor you will have the ability to choose the projects in which you want to save and place your money, you will always know where your savings are and the returns it is generating.
2. Availability: In Peer to Peer Lending there are no times or places, if you need a summary of your account, if you want to increase your investment or savings, if you want to modify any of your movements you can do it online, the platform is always open for your service .
3. Diversify your Investment: In Peer to Peer Lending your investment never depends on a single project, you always have the ability to to invest in different projects depending on the amount of your investment.
4. High Yields: When you compare the Peer to Peer Lending model against banking or credit circle models, you will be able to confirm that the returns on your money they are much larger, of better capacity and of greater security.
5. Less Risk: All investment models involve a risk, It is a real and current premise, however those that are less risky are the Peer 2 Peer Lending models, this because you invest in different projects that you select yourself, even if you prefer not to have anything of risk, on P2P Lending you have the ability to save your money and choose one of the formats that guarantee a return on investment.