Peer-to-peer (P2P) lending is a fairly straightforward concept: networked lending between people who want to borrow money with those who want to invest money. Also known as social lending, this form of crowdfunding is facilitated through specialized investment firms and websites.
It's the revolutionary multi-billion-dollar industry nobody's heard of, and it's killing credit card debt for hundreds of thousands of consumers. It's not only disrupting, but completely undressing the traditional credit model.
Peer-to-peer lending is one of the hottest trends in this new world of loans, and can change the way we look at debt -- particularly the crushing burdens of student loans and the growing expectations of post-graduate degrees.
In the current economic climate, person-to-person (P2P) lending has become rather popular. It provides alternatives for both borrowers and investors who are looking for ways to meet their financial goals.
If you're like a majority of average American investors, you earn 1 percent or less in your savings account, mutual funds or bonds, and lose 2-3 percent to inflation. Ever wonder where that 2 percent difference goes?
Is this the beginning of an outright social movement? P2P lending will certainly not displace the retail lending divisions of the big banks anytime soon. That said, well-regulated social banking clearly offers many advantages.
The web is making it easier to borrow money from a community of strangers using a concept called "peer-to-peer lending." Entrepreneurs are embracing it to find virtual "friends & family" to give them loans.