Peer-to-peer lenders attract investors with double-digit returns

Savers are earning almost 10 per cent a year by lending online through banking’s answer to eBay.

Peer to peer or P2P lenders, to use their cyber-savvy name, are auction sites for potential lenders and borrowers who bid an amount and an interest rate.

The biggest are RateSetter​, aimed at ordinary investors, and SocietyOne​, which caters for professionals.

The most common reason borrowers apply for a peer-to-peer loan is to buy a new car.

Both run the credit checks for you. Still, it’s a big jump from investing in a government-guaranteed term deposit to an unsecured loan to somebody you don’t know and never will.

But so far the risk is paying off.

Borrowers, who bid for a lower rate than the banks would charge them, are also winners.

Source: Peer-to-peer lenders attract investors with double-digit returns