Is Peer-to-Peer Lending Too Risky?
Peer-to-peer lending has shown itself to be a smart debt management technique in a time when credit is hard to come by. Credit card companies are raising rates and dropping consumer rewards, and the relatively inexpensive rates charged by social lenders can save consumers a bundle. Borrowers can consolidate high interest loans into one lower interest loan and take up to three years to pay back the debt. The sheer brilliance of this scheme, so well timed in this economy, got me to thinking about social lending as an investment. Is peer-to-peer lending a good investment? First of all, if you are in a social loan right now, it’s not the right time to start investing in it. Pay off your loan, avoid new debt and then look at social lending after your debts are paid off. The investment is unlikely to pay more than you could save by paying off your loans and pocketing the saved interest. But if you have the extra money, social lending may just be a better bet than stock markets or even real e
