Personal Investment -- Peer-to-peer lending (P2P Lending)

by Feng Zhang Network Engineer

Peer to peer (P2P) lending is social network connecting borrowers and lenders together. Lenders compete the rates for borrowers to accept. Traditional P2P lending has very long history. It operated mostly on 1 to 1 based. The lenders would lose all the investment when borrowers go default.

Online P2P lending is a young and very fast growing industry. It started in UK in 2005 by a company called Zopa. Two US companies, Prosper and Lending Club launched in 2007. Prosper and Lending Club got attention of Google. Google invested millions in both companies.

Online P2P lending has different approach then traditional P2P lending. Investors can diversify their investment to different loans to lower risk. The average annual return of P2P lending is about 9%. It is safer than stock market and has much better rate than back saving rate. You can start as low as $100.00.

I just open an account with Landing Club. You can check them out at

www.lendingclub.com

www.prosper.com