Peer-to-peer (P2P) lending is a method of debt financing that enables individuals to borrow and lend money without the use of an official financial institution as an intermediary.
P2P platforms connect borrowers to investors with attractive interest rates. For lenders, the loans generate income in the form of interest which can often exceed the interest amount that can be earned from saving accounts.
In addition, an investor is able to earn a higher return on his investment than he can get from the stock market through the interest payments he receives monthly from the borrower.
On the other hand, P2P loans give borrowers access to financing that they may not have gotten approval for from standard financial intermediaries. Furthermore, a borrower gets a more favorable interest rate on her loan than one she would otherwise have gotten from a bank