What is peer-to-peer lending? You lend money to borrowers through a platform. They pay interest. You hope they pay back. The platform takes a fee and grades risk — but grades are opinions, not guarantees.
Why do people try it?
Term deposit rates disappoint. P2P ads show higher numbers. Some investors earn well. Some lose when borrowers default or platforms struggle.
What can go wrong?
- Defaults: worse in recessions, even with diversification.
- Platform risk: weak governance or closure plans.
- Locked money: you may not get it back quickly.
How much should you put in?
A small slice of investable money — not emergency cash, not your entire retirement. Read the product disclosure statement like a contract, not a brochure.
What questions should you ask the platform?
What happens if they shut down? What is the real default rate by grade? Vague answers mean your money is hopeful, not passive.
