Peer to Peer investment is the process when an investor directly invest into the need of an other. Typically this type of investment is reserved investors who wants to invest into a fund who in turn borrower the money as a personal loan to somebody who needs the money. The fund managers then ensure that the loan is repaid and that the profits made from the loan is paid to the investor.
Peer to Peer investing has established itself as stable investment option which provides moderate but stable returns to the investor. Peer to Peer Lending Clubs or Social lending Clubs has establish themselves as vehicles to drive this process. Investing in a Peer to Peer lending club or social lending club allows investors to pool money and then to lend the money to borrowers through an over seeing body.
With the current world financial crises Peer to Peer investment emerged as a very attractive option. Banks are turning many legitimate and credit worthy borrowers away. The potential borrowers are looking for alternative but still affordable ways to finance business expansions/opportunities, home financing, new cars and even that one in an lifetime holiday.
Since Peer to Peer lending clubs are positioned well to fill the gap, Peer to Peer investing/borrowing has experienced growth with excellent returns to the investors while providing acceptable terms to the borrowers. Considering that this growth occurred within the current financial crises any serious investor should consider to add Peer to Peer investment to their investment portfolio.
Peer to Peer investing complements the low to medium risk leg of the investor’s portfolio. Since it is not uncommon for borrowers to enter in loan agreements with repayment periods of up to three years the Peer to Peer investor can expect a stable and predictable return on the investment for years to come.
Investor who choose the Peer to Peer Investment vehicle will find they will continue to invest in the Peer to Peer investment vehicle even when the financial tide turns as it will continue to provide a income stream during bad and good times.
