A guide for savers with money to lend and borrowers in need of a loan.
Peer-to-peer lending provides a great way for savers to get a better return on their savings and borrowers to pay a lower rate on their loan. By cutting out the middleman – a bank or building society in most cases – everyone stands to win.
Here we provide our guide to the major players, including the market’s founding pioneers and the start-ups giving them a run for their money. We cover sites that lend to individuals as well as those that focus on raising business finance and loans for property investment.
Making the right choice of provider is essential. While these companies are now regulated by the Financial Conduct Authority, savers’ money is not protected by the Financial Services Compensation Scheme meaning there is always the risk you could lose it. Therefore, before lending any money you need to know what will happen if your borrower defaults – is there a provision fund to bail you out or some security to call upon?
If you need to know more, check out:
SOCIAL FINANCE PEER-TO-PEER LENDING: BUBBLE IN THE MAKING?