Peer to peer (P2P) loans are the new frontier of financing without banking intermediation, to be carried out directly online. This is a credit method that is expanding in Italy only in recent years, while in other countries, such as the United States, it has been a consolidated reality for longer. Despite the fact that in Italy the companies specialized in this sector are still few, the market is expanding and offers new opportunities both for savers and for those who need a loan. The objective of the peer to peer is precisely to put in contact without intermediaries who wants to invest and who asks for funding.
Peer to peer investments are therefore also called a private lending
But also social lending , or social loans: without having to necessarily go through the intermediation of banks, P2P loans in fact allow investors and loan applicants to “know” each other , often via the internet. The saver who invests his resources knows precisely the person or, more often, the entrepreneurial project he is financing. This guarantees greater control and transparency. However, it is good to rely on services that are experts in this field.
Those who have set aside savings can make P2P lending an opportunity to make a profit: in addition to being able to choose to finance innovative and socially sustainable projects, it is also possible to identify the risk bands that need to be tackled, with relative returns.
Thus, particularly risky projects will be matched by higher interest rates
The companies that manage the service in an advanced way offer savers a wide choice, based on the creditworthiness of those who request financing. Against this service, for peer to peer loans the company requires the payment of a commission (usually around 1%).
The peer to peer loan can also be used by those who need online financing, but who do not want to go through traditional banks. Furthermore, it is possible that with this choice it is also possible to access more advantageous interest rates. However, the costs of the loan depend on the insolvency risk of the applicant and on the market in which one is classified. The social lending company will therefore assign the debtor a certain level of risk, to which a return will be payable to investors.