Peer to peer lending is an impeccable platform which connects borrowers with individual lenders, wherein these lenders come together to fund the loan requirement of the borrowers.
Borrowers can find attractive interest rates through this platform and lenders can find higher returns compared to other investments in the market, which makes this a good investment opportunity for the lenders.
Through the P2P lending platforms, lenders can have diversified portfolios which mitigate the risk associated with loan defaults. Another advantage is that the platform is online, which provides for a strong data trail, thus leading to a high level of transparency. The simplicity of the platform and its ease of use is its advantage.
Investments in the stock market
Investment in the stock market is best for those who have an in-depth know how about it because the investment method is akin to a gamble for those who don’t have the requisite knowledge about investing in stocks. For the people who are uninitiated, it is very difficult to find such type of investment.
Knowledgeable investors mitigate the risks by conducting an in-depth study before investing and then end up getting high rate of returns. If one does not have those skills, it is smarter to diversify the investment into many financial assets before investing in stocks directly.
Since stocks are easy to buy and sell, there are many brokers and institutions available for the investor to choose from. However, the downside of this investment is that anyone can lose a portion of investment without any fault. Thus, the stock market is not everyone’s cup of tea.
The stock market is for those who are willing to invest a lot of time and research in the portfolio and who also have the ability to analyze the trends in the stock market.
In this context, P2P lending is considered a good option since the lenders can pick the borrowers at a quick glance and also outsource the recovery and security mechanism in the P2P lending portal which ensures high returns.