P2P finance – tips for savers and borrowers

Financial services in the UK are undergoing their largest transformation since the so-called Big Bang liberalisation of the 1980s. Much of that change is being led by peer-to-peer (P2P) lending and borrowing but what does online P2P finance offer to both borrowers and savers compared to that provided by the traditional banks that it seeks to bypass? What is P2P Finance? Peer-to-peer lending websites allow savers with money to spare to lend it to individuals or companies that need to borrow. P2P lending has enjoyed a boom in the years since the financial crisis because of the paltry rates of return on standard savings and investments caused by record low interest rates. Borrowers are also said to benefit from more flexible and tailored loans with lower interest rates than when they seek finance through the mainstream banks. There are many P2P finance sites in the UK but the three biggest are Zopa, Funding Circle and RateSetter. What does P2P mean for savers? There is no “one-size-fi


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