A critical reason which led to the growth of P2P firms is that it is a secure method with no paperwork burden, and money is directly transferred to your bank account without a lot of formalities, unlike a bank. It is called a cheaper and convenient way of loan. These agencies are not limited to the personal loan only as they have achieved success and extended their services, so now even they provide a student loan, property loan, and loan for vehicles.
UK has one of the most renowned and robust economic muscle in the world. However, the recession in 2008-2009 has made it go through a rough patch. The recession attacked some of the main financial strengths of the UK, like banks, real estate, and other investment platforms.
Fortunately, in the period of rescission Peer to Peer lending investment plan manage to survive and offered the UK economy new hopes. Since then, Peer to peer lending has never looked back and held its foot secure in the UK. If you are a citizen of the United Kingdom looking for versatile and renowned investment platforms, then P2P lending can be the best choice.
Are you new to P2P investing? Wonder what are the best P2P platforms in the UK that you can trust? No worries, we are here to help. Below we are sharing top tips on choosing on best Peer to Peer lending platform in the UK:
What is P2P lending?
Peer to peer lending is an innovative investment and credit platform where investor interested in lending money is matched up with the borrowers. The Platform connects the lenders and borrowers on its online portal directly. Like most banks, P2P lending is indulged in both personal and crowed funding loans.
What are the advantages of P2P lending?
Crowdfunding comes with multiple benefits. It offers flexibility to both the lender and borrowers by eliminating the middle man like banks. P2P lending also promises higher returns to the investor depending upon their profile and investment levels. On the other hand, borrowers like startup companies, students, people with poor credit scores, and others who often struggle to get loans through banks can take benefits through P2P lending. Other then these, P2P lending platforms are versatile, easy to use, support online operations, more flexible, transparent, and more with affordable services. Most of the top P2P lending platforms in the UK can offer you 5 to 7% annual rates on your investment.
What are the disadvantages of P2P lending?
Along with all the benefits and advantages of P2P lending, it also has a few drawbacks that you should keep in mind before investing. One of the significant downsides of P2P credit is the risk of payment default from the borrower’s end. There is low insurance on P2P lending platforms.
Though investing in P2P lending can be both high returning as well as risky. Still, with an excellent strategic investment plan, you are more likely to get maximum benefits from this modern investment platform.
How to know what P2P lending Platforms are best for investment?
Being an investor having concerns about the reliability of the P2P lending platform is quite expected. Thus, it would be best if you considered a few key factors before investing in any platform.
- Check the background of the lending platform: Before picking out any lending platform in the UK, you should consider checking the history of the company. Make sure to cross-check all the details of the company like its startup year, credibility, the experience of the investment team, loan manageability, responsive site, and more.
- Transparency: Finding details of the investment platform and its credibility is quite comfortable with the help of top review sites. You can go through top reviewing sites to seek the opinion of the best editor and honest public opinion. Click here to sneak peek about the best P2P lending platforms in the UK.
Other then this you should also pay close attention to the following:
- Check the Platform’s regular or typical Borrowers: Make sure the Platform has the right balance of different types of borrowers. Check if the primary borrowers of the Platform are individual or company.
- Procedure period: Check what procedure and criteria the Platform follows to register borrows or lenders on its Platform. Make sure they have a valid and reliable method to eliminate default payees.
- Recovery process: Make sure that the Platform offers a solution to default loans. Check if the P2P lending company has any recovery plan or not.
- What are the reviews of the previous customer: you should also consider the experience and reviews of the previous customers to ensure.