BBC Discusses Peer-to-Peer Networking
It does at last seem that personal finance correspondents like the BBC’s Simon Gompertz, are getting the hang and idea of peer-to-peer lending. He has just written this article about it. Here’s the first three paragraphs of the piece.
Lending via three websites that link savers with borrowers – bypassing the banking system – has topped £250m.
The “new age” finance carries no protection for deposits, but is being tipped as a serious threat to traditional banks.
The peer-to-peer sites are led by Zopa, which has lent more than £200m since it started in 2005.
I’ve been using Zopa since 2008 and would say that anybody who uses the Internet competently, has a basic knowledge of finance and is prepared to research how they handle their money, should consider Zopa or one of its competitors. So if you can’t be bothered to read Simon Gompertz’s article, then peer-to-peer lending is not for you.
On the other side of the coin, if you have a good credit record and need to borrow a few thousand pounds for say a new car or a house extension, get a quote from one of peer-to-peer lenders and compare it with what your bank offers.
Always ask a lender what happens, if I want to settle up early. Many lenders make their money by imposing extra charges at this point.