5 Ways Peer-to-Peer Lending is Changing the WorldSep 29, 2014 Blog Personal Finance
Tweet, Hashtag, Like, Poke, Comment. Social media has opened the world up to a totally new way of interacting. It is this brave, new world that has brought about a shift in thinking – on every level. Peer-to-peer lending is one of these shifts. Take a look at the 5 ways peer-to-peer lending is changing your world today:
Peer-to-peer lending is disruptive in every way; challenging the financial system and giving you more information about your money. By going down an unconventional route we are creating new ways for your money to grow. You can now leverage your pay-cheque to invest in someone else, creating a new income stream. More importantly, it takes the power out of the hands of the banking system and puts it firmly back in yours.
2. So Social
People come together to start new projects, invest in one another and ultimately get better returns. It’s a more people-centric way of investing. You can fund projects in your community, adding value to the people and communities that are close to you, or simply invest in a great idea. By kick-starting careers, you’re not just helping yourself but others too. Its like lending and borrowing money from friends or family, only you get a better return!
3. Debt Control
One of the many reasons to borrow money from peer-to-peer lending platforms is to consolidate your debt. People can opt for a personal loan at lower interest rates to consolidate credit card debt, reducing the amount they spend each month and getting out of debt faster. Also credit card debt can adversely affect your credit rating compared to a personal loan.
4. Spreading the Wealth
From an investor’s point of view, peer-to-peer lending provides a different kind investment. You can get access to the credit instruments directly without a middleman, allowing you to make informed decisions without lining some suit’s pocket. This diversifies your portfolio and gets you a better return on your investments. Diversification also applies to the deals you choose to fund. You can spread your investments between high-risk-high-reward loans and medium-risk-medium-return ones, creating a balance in your portfolio. For example, you can invest more in a person who has a lower risk score and less in the person with a higher one.
5. Choose Your Own Adventure
Why put your money into a savings account and forget about it? You can do so much better with social lending and taking control of your money. You can analyse the credit reports of the people you are lending to, compare them to one another and choose the projects you want to invest in. Ultimately, you decide if you want to make positive change in the world by kick starting projects you believe in by using a platform like RainFin.