If you’re anything like me financially, then you are angry at the banks when we borrow and when we deposit money. Why is that you ask? This is because the banks use our deposits and pay us a measley interest rate in doing so. In turn, they lend our money out at higher rates to small business or individuals like you and me to generate big profits. Wouldn’t it be great if we could level the playing field? Introducing Peer to Peer lending.
This new disruptive technology allows ordinary people to loan their money for 1 month, 1 year, 3 years or 5 years to the consumer market. What’s great about this is that we act as the lender and can determine the rate of return we want. I myself have lent my funds out at about 5% per annum. What term deposit on the market is giving that rate of return? None!
Since this type of lending is relatively new to Australia, it isn’t without its risks. That being said, there is a compensation fund available should the borrower default on their loan.
If you want to learn more and join one of few peer to peer lenders on the market, visit Ratesetter.com.au.
-Damien Nguyen
