Peer-to-peer lending and borrowing has been
around for over 10 years in the UK. Classically
individuals (or businesses) would save their money in
a bank, and the bank would then lend that money to other
individuals or businesses. P2P removes the bank
from this process. There are a growing number
companies that can facilitate this process.
This process has also be referred to as social lending,
crowdlending and marketplace lending.
What advantages are there as a lender?
Lenders can obtain
higher rates than they can with a bank or building
society. For comparison, the highest rates on
comparable savings on
MoneyFacts is only 2.9% AER*. On some sites
lenders are able to set their interest rates.
perspective this process is quite different from
simply opening a savings account.
What advantages are there as a borrower?
Borrowers could obtain
lower rates than from other loan providers,
and they also have the knowledge that they are borrowing
money from individuals like themselves. From the
borrowers' perspective the process is not too
dissimilar from dealing with a bank or building society.
Is my money safe?
is always asked by people new to P2P! Peer-to-peer
lending is not covered by the Financial Services
Compensation Scheme and your capital is at risk.
the different aspects of peer-to-peer lending, so
you can make and informed decision if P2P lending is
Where can I search for information?
You can search
information on the P2P money website, or alternatively
you can use the
peer-to-peer search engine which will look for information
within the peer-to-peer arena, or check out the P2P
* Rates quoted from
MoneyFacts 3 year bonds correct as of 14th
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