How does peer to peer lending work

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Peer to peer (P2P) platforms bring together people wanting to invest with borrowers that are looking for a loan, delivering better value to both.

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Until now, people have not been able to lend directly to borrowers in a meaningful way. Instead they have had to put their money into a bank deposit and the bank then lends their money on.  Banks are regulated with the objective of keeping deposits safe, but this comes at a price: low returns that often can’t even match inflation.

P2P lenders like RateSetter are different to banks – we are optimised to deliver value. We offer the opportunity to put your money to work, by efficiently matching investors with borrowers, allowing investors to directly enjoy the risk and returns.  We have an excellent track record of delivering steady, healthy returns to investors since 2010.

P2P lending is becoming a popular investment for people that are diversifying their investment portfolio, because lending sits in the gap between the safety, but low returns of cash deposits and the potentially large returns, but volatility of shares.

 

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