P2P Lending (Peer to Peer Lending)

Peer to peer (P2P) lending is a method for people to lend or borrow money without going through a financial institution. P2P lending is typically used by investors who are looking to get a bigger return on their cash savings than they would through a traditional bank savings account. An investor creates an account with a P2P lending site and deposits their desired sum of money to be distributed into loans. The loan applicant can review offers and either accept or deny them once they post a financial profile and the interest rate the applicant will pay is determined. The exchanges of money are handled through the platform, enabling businesses to raise capital without going through a traditional financial institution like a bank.