Wednesday, March 30, 2016
The current interest rates on money market and savings accounts as well as 3-year treasuries and Certificates of Deposit (CDs) are very low. Investors are also getting low yields on municipal and corporate bonds. This article discusses how low risk peer-to-peer (P2P) loans have been looking much better by comparison. “It’s a system that lets individual and institutional investors fund loans directly to individual borrowers for purposes like credit card consolidation, education, home improvement and vacations.” There are lending companies that act as intermediaries between the borrowers and lenders, and they handle “record keeping, fund transfers, fee assessments and delinquent loans, among other tasks.” This article discusses some of the risks involved with peer-to-peer lending and how people can mitigate those risks. There are many reasons why people might want to consider this investment option, but they will need to do careful research to see if it is the right option for their circumstances.
See Amy Fontinelle, Peer-to-Peer Lending: How Retirees Can Make Money, Investopedia, March 29, 2016.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.