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.