How to Make Money With Peer-to-Peer Lending and Pinterest

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The BBC take a look at Peer-to-Peer Lending

What is Peer-to-Peer Lending or P2P Lending


The UK's Peer-to-Peer Lending Market has trebled in just three years. Digital finance lending set to hit £1bn (ft.com, article by Elaine Moor July 15, 2013)

In the wake of the 2008 banking crisis, those of us who were lucky enough to have had a little money saved, saw the interest rate plummet to barely negligible levels. The government poured billions of our hard earned tax, into the system to prop up the banks. And while this was good news for the banks, it was bad news for savers.

For the bankers, it was business as usual, not so for the savers. Banks no longer needed to compete for customer's savings. Therefore, there was no need to pay competitive rates of interest. However; as the saying goes, “it's an ill wind that blows nobody any good” and as we learned in our science classes when we create a vacuum something always rushes in to fill the void.

Enter the new kids on the block. The newcomers quickly saw the possibility of making money by cutting out the middlemen, or 'bankers,' and a way to fill the ever-widening gap in the market. They created an alternative to traditional banking and a new era of lending and borrowing.

Peer-to-Peer lending also known as P2P, social lending, crowd lending or lend-to-save, is an innovative form of online social lending services that act as an online broker between borrowers and individuals who are willing to offer loans.

Put simply, Peer-to-peer links savers to borrowers. Ordinary savers, as well as wealthy investors who are looking for a better return on their money, are brought together with borrowers seeking loans with low or competitive interest rates.

Many small businesses and individual borrowers are finding Peer-to-peer lending a real alternative to banks and building societies.

Where lenders such as Payday loans targets the most financially vulnerable people who very quickly becomes trapped in a spiral of debt, with extortionately high-interest rates, peer-to-peer lending offers opportunities for lenders and borrowers that are mutually beneficial.

The borrower gets a flexible, low-cost loan, and the saver earns better returns on their savings. The people who save and borrow money from these sites can be anyone, young professionals, pensioners, entrepreneurs or businesses. The website does the repayments and chases the borrower on the lender's behalf.

With the middleman out of the picture, borrowers are offered lower rates of interest, and the saver enjoys a better return on his/her savings than they would from a traditional bank while the site makes its profit by charging a fee.

Credit checks are used to pick the borrowers who are rated according to how risky they are assessed to be. Income tax on interest is paid as it would through the banks.

ZOPA

The UK's largest peer-to-peer lending service is Zopa. Set up in 2005, Zopa's total loans this year is expected to reach £200m, doubled the amount for 2012, with projections for 2014 in the region of £400m. Zopa has concentrated on offering personal loans in the past but is now looking to extend their services to businesses.

Thus far, peer-to-peer are not regulated. However, regulations are pending as the Financial Conduct Authority gets into gear for April 2014. Regulation will offer some protection to both borrower and lender. This types of saving and investing can work well if the investors are willing and able to lock their cash away for a period.

The saver chooses how much money to put away and for how long, to get a fixed rate (after fee and bad debt adjustment). Currently, for three years rates are 4.1% for 4-5 years 4.4%

Crowdfunding is another simple idea where people come together to fund specific projects. The project can be anything, finance for a small business, publishing a book or funding for filmmaking

However; where Peer-to-peer lending consists of a loan that the borrower must repay, Crowdfunding is a means of raising money by asking a large number of people to contribute a small sum for a particular project.

This type of fundraising is gathering momentum as more entrepreneurs than ever before are taking to the web for cash to finance various ideas.

This latest funding innovation, also offers small business owners who are unable to raise money from the banks, an opportunity to get funding from different investors. Anyone can benefit from investing in fledgling start-ups, investments may be large or small, as much as the individual is happy to risk.

Projects range from help with the financing of community projects where there is no financial gain, to large investments purely for monetary gain.

The UK Crowdfunding Association list three types of crowdfunding;

  • Donation Crowdfunding people may invest in a project because they believe in the cause; the reward could be as simple as a pair of tickets to an event, some free gifts, regular updates, or in the case of a music album, acknowledgement on the album cover. Individuals who donate are personally or socially motivated and expects nothing in return. UK sites include: www.banktothefuture.com, www.buzzbnk.org, www.crowdbnk.com, and www.peoplefund.it
  • Debt Crowdfunding Investors get their money back with interest, i.e., Peer-to-peer lending.


  • Equity crowdfunding People invest in an opportunity in exchange for equity. Money is exchanged for shares in a business or venture. Sites include:

www.banktothefuture.com,

www.crowdbnk.com,

www.seedrs.com


Never A Borrower Or Lender Be

Some people work hard to avoid debts, some take on far too much. Where do you fit?

See results without voting

The Disadvantages of Peer-to-peer lending

There are many advantages to peer-to-peer lending, but there are also disadvantages. Disadvantages are mainly to do with the risk factors associated with this type of lending and borrowing.

Once the money is borrowed, the borrower may default on the loan. However, sites like Zopa carries out very stringent credit checks on loan applicants. Money is divided into ten chunks and spread across different borrowers to minimize the risk.

According to the chief executive of Zopa, the company's default rate is only 0.23 percent. Both Zopa and Ratesetter have built up funds to reimburse any losses as a result of default on payment of money borrowed, plus the interest.

In our current economic climate, the phenomenon that is Peer-to-peer lending is a simple concept who's time has come.

Compare Person to Person Loans

Members of Consumer Magazine Which? have rated the UK's three biggest peer-to-peer lending sites.

 
Explanation of risks to savers
Ease of use
Savings rates
Customer score
RateSetter
****
****
**
65%
Zopa
***
***
***
65%
Funding Circle
**
***
****
61%
According to Which? customer score are based on an April 2013 survey of 4,510 Which? members, 389 of which had used a peer-to-peer site to invest money in the last two years. The overall customer score is based on overall satisfaction with a site's s
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Write inspirational quotes on your images, pin and link back to you website, blog or hubs. The above quote is by William Shakespeare, Troilus and Cressida.
Write inspirational quotes on your images, pin and link back to you website, blog or hubs. The above quote is by William Shakespeare, Troilus and Cressida. | Source

How to Make Money With Pinterest


Make money With Pinterest

Here on HubPages, most of us are using Pinterest to post our hubs and beautiful pictures, but are we taking full advantage of this social networking website? Are we making money from popular social networking sites like Pinterest? I bet the answer is a resounding no or very few. Pinterest is fast becoming the best social networking site for promoting and selling your business, anything from Clickbank affiliate products, Amazon affiliate program to your latest ebook.

Subscribe image

Although it is not possible to place an opt-in form on your pinterest boards, there are ways to encourage people to subscribe to your email blast or website, you can do this by taking a screenshot of your opt-in page, upload it to Pinterest then edit the link to point back at your opt-in page. Explain why people should subscribe in the description box.

Your followers on Pinterest will be directed to find more information. Do some research, find out how other businesses are getting signups for Pinterest. What call to action they are using, you can try, 'to join our mailing list click here,' or, for more information click here.

If you have a giveaway incentive for signups, include some impressive images to represent the incentive. On the other hand, if you do not have a giveaway or an opt-in page, you can use a picture that grabs the attention, and use the description for the image to its best advantage. Make use of any interesting statistical data that will help to sell your product, pin it and link to the opt-in page.

Video Explainer

Use an explainer video to walk potential customers through a specific problem. Show them how your product can help them to solve their problem. Make your point quickly and clearly, and remember to place a link to your sale page in the video and the pin. If someone repins the video, they also get your link.

Selling Physical Products on Pinterest Social networking site

When it comes to pinterest, physical products are the best sellers. To promote your product, show it in use, or photograph it in an appropriate setting. If your product is cooking utensils, makeup, or home decoration, show it in action.

Make use of Pinterest's rich pins functionality, to help your business and product stand out on Pinterest. Pinterest is about the visual representation of your products, your mailing list and services. Only the best images will result in likes, shares, click-through and comments.

Pinterest widget add Pinterest widget button to your website or mobile apps. Businesses who use the Pin It button see good increase in referral traffic. If you haven't already, get your Pinterest invite and start pinning. See New York Times on Pinterest



By J Alexis-Hagues © 05 /11/2013

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34 comments

tobusiness profile image

tobusiness 2 years ago from Bedfordshire, U.K Author

Hi Nadine, I guess most of us would love to be debt free, and although it may seem impossible now, there's alway hope that things will improve. With it's very competitive interest rate P2P is a good way to start either as a borrower or an investor, but alway do the research to ensure you will get your investment back if things doesn't quite go to plan. Thank you for checking this out, I hope it will be useful. Take care and my best to you.


Nadine May profile image

Nadine May 2 years ago from Cape Town, Western Cape, South Africa

That is a great informative hub. My dream is to really be totally without any debt, but in today's economic climate its almost impossible. Thank you for sharing this information.


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Electronician, you are right, more people should use P2P. However, I think as people become more aware that there is an alternatives to the banks and Payday loans, they will start to see the advantages of P2P. Thank you for taking a look at this, I hope you found it useful.


electronician profile image

electronician 3 years ago from Birmingham, England

Peer to peer lending is a great idea, I really think more people should go down that route and plan to do so myself if I need to borrow or have money to invest anytime in the future.


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Hi midnightbliss, I'm sure the banks will do all they can to put a stop to P2P or at least have a darn good try. Over in the UK this type of lending and borrowing is growing and I believe at least one company will be merging with another in the US soon, so the US banks may just have to become more competitive, which can only be good for the customers. Thank you for checking this out, and for the very insightful comment, much appreciated.

My best to you.


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Suzette, this is so typical of the banks, they've got no soul. :)


midnightbliss profile image

midnightbliss 3 years ago from Hermosa Beach

Informative hub. Peer-to-peer lending has become extremely popular and, as noted, with Lending Club taking the lead. It will be interesting when the organization finally IPOs and how the traditional banking industry intends to respond to this threat. I suspect they're paying their lobbyist in Washington quite well to design/push legislation in an attempt to marginalize losses.


suzettenaples profile image

suzettenaples 3 years ago from Taos, NM

We got rid of payday loans in the state of Ohio and then the banks started doing this calling it Early Access to your next paycheck direct deposit and charging the outrageous interest fees! Go figure!


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Suzette, a pleasure to see you. P2P is a wonderful idea, I do wish our government would do something about the payday loan companies, they charge massively high rates of interest, and with most country's economy floundering, this way of borrowing causes more heart aches than we realise. With P2P lending the borrower pays only a small fixed rate of interest, and may even be able to negotiate with the lender, everyone wins. Thank you for stopping by, much appreciated and my very best to you.


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Frank, always nice to see you, thanks for stopping by much appreciated.

My best to you.


Frank Atanacio profile image

Frank Atanacio 3 years ago from Shelton

too business you are a wealth of informaion and ideas I never heard of p2p until now thank you


suzettenaples profile image

suzettenaples 3 years ago from Taos, NM

Jo: this is such sn interesting article. I did not know about either one of these you write about. P2P lending is something new to me. It sounds very interesting and I see how everyone benefits. I don't think many onthe U. S. know about this. The ingenuity of the UK is great. I also didn't know about Pinterest. That is so interesting also. Thank you do much for sharing your knowledge with us.


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Hi Nell, thank you for the visit, comment and share, much appreciated. Pinterest is becoming much more business orientated, if you have the time take a look at the video, it's very enlightening. Take care and my best to you.


Nell Rose profile image

Nell Rose 3 years ago from England

Hi, oh my goodness! I never knew about rich pins on Pinterest, in fact I usually just put my link there and share other peoples! I am going to have to really read the darn site! lol! as for the peer to peer lending, what a great idea! And yes we are all fed up with the big loan companies and the banks, what great info! thanks, nell voted up and shared!


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Hi Flourish, thank you for taking a look at this, Peer-to -peer lending is an interesting concept, a good way in which people can help one another and get a little something in return. The problem is, so many have never heard of it, it is good to know there are alternatives to the banks. Pinterest is growing fast we need to keep up. :) Take care now and my best to you.


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Hi Ghaelach, what a pleasure to see you! I'm so glad you found the information useful, yes the video is long but very informative. Enjoy the game, my best to you. :)


Ghaelach 3 years ago

Good evening Jo.

WOW.

This is some awesome hub.

Just finished the video with "The Miss Fit Momma" that lasted one hour, and that taught me a lot of things I'd never even heard of.

It's a bit late to start now (football in 10 min's) but I'll be spending most of the next few days seeing if I can put some of this info to work.

Thanks for sharing this info Jo

Voted up and sharing.

LOL Ghaelach


FlourishAnyway profile image

FlourishAnyway 3 years ago from USA

Nice hub, Jo! Although I had heard of peer to peer lending, I've never tried it. I like the idea of people dealing directly with one another and cutting the big corporations out of the deal. I'm on Pinterest and haven't thought about money-making other than referral trackers. You are such a clever one!


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Hi Kim, always a pleasure! Many of us fail to realise the potential of social media sites like Pinterest. I hope this will prove to be useful. Take care and my very best to you.


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Hi Devika, lovely to see you. Thank you for taking a look and for the vote, much appreciated. Have a wonderful day and my best to you.


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Hi crafty, always nice to see you. Isn't it insane? Those who could least afford to, must pay the highest rates. Peer-to-peer also do stringent checks but the borrower can appeal to the lender who may decide to overlook the credit rating. Thank you for stopping by and for the great comment, my best as always.


ocfireflies profile image

ocfireflies 3 years ago from North Carolina

Jo,

You are so good at providing useful information and presenting it in a user-friendly way. I have been wondering about Pinterest, but to embarrassed to ask. You must have read my mind. Voted up and shared for I am sure there are others like me who would like to know more about these opportunities.

Kim


DDE profile image

DDE 3 years ago from Dubrovnik, Croatia

How to Make Money With Peer-to-Peer Lending and Pinterest so interesting and informative indeed, another learning experience for me, sounds a great idea. Voted up, useful interesting


CraftytotheCore profile image

CraftytotheCore 3 years ago

Very interesting and useful Hub on this subject! I know that banks around here require a minimum of 740 credit score to even consider someone for a mortgage. There are all kinds of loans, but the most desirable with the lowest interest go to those with the highest credit. It's nice to know of other alternatives when people need to borrow money and can't get it from their bank.


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Hi Faith, it is always good to see you! Peer-to-peer is such a good simple idea, it's strange, even here in the UK, everyone knows about Payday loans despite the incredible high interest rate, but very few people know about peer-to-peer lending.

As for Pinterest, the site is great for selling physical products and many people are making good money from this site. We must stop looking at Pinterest as a social media site and start making money. Thank you for stopping by and for the great comment, have a wonderful day and my best to you.


Faith Reaper profile image

Faith Reaper 3 years ago from southern USA

Awesome hub dear Jo! Wow, never heard of any of this, so thank you for the education here. I will have to study this hub more to take in all of this wealth of information you have provided to us. I am on Pinterest, but never understood how to make money on it, and I will study more on that as well.

Up and more and sharing

Have a great rest of the week,

Faith Reaper


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Alphadogg16, nice to see you! Pinterest is so much more than just a social media site, facebook appears to be on a downward trend, while Pinterest is growing fast and offering so much more. Thank you for taking a look, much appreciated.

My best to you.


Alphadogg16 profile image

Alphadogg16 3 years ago from Texas

Very interesting and informative hub tobusiness, I was unaware that Pinterest could be so beneficial/useful. Definitely requires some looking into. Thumbs up on your hub.


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Hi Sallybea, thank you for taking a look at this, if I managed to hook you within the first ten seconds then I must have learned something from that wonderful teacher, Mr Billybuc. :)

it's surprising how many of us use Pinterest, but never really see it as anything more than a pinboard for pretty things. Take a look at the video it's very revealing. I very much appreciate the visit and great comment, take care and my best to you.


sallybea profile image

sallybea 3 years ago from Norfolk

You have me hooked right from the first moment. Fascinating stuff - I need to sit down and study this info carefully. I use Pinterest and quite a lot of traffic to my Hubs comes from there but I am definitely not using it to it's potential. Thank you so much for sharing this info - great Hub. Voted up.


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Hi Bill, always a pleasure! Sometimes the best ideas are the simple one. With no overheads, sites such as Zopa can afford to undercut the banks by offering affordable rates of interest and still make a good profit. As for pinterest you should be promoting your books and ebooks there. It's not just a pinboard for women anymore.

I hope you're having a very productive day. :) My best to you as always.


tobusiness profile image

tobusiness 3 years ago from Bedfordshire, U.K Author

Hi Kidscraft, such a pleasure to see you. Thank you so much for making my first comment so very positive.:) Peer-to-peer lending is such a simple idea, some communities has been doing it for years. When we see some of the crazy interest rates that are being quoted these days, it's hard to understand why more people aren't aware of the cheaper alternatives. Take a few minutes and check out the Pinterest video, it is very interesting, especially if you have a product to sell or promote. Thank you again for the visit and comment, always appreciated and my very best to you.


billybuc profile image

billybuc 3 years ago from Olympia, WA

How fascinating, Jo! I had no idea there was Peer-to-Peer Lending going on...never heard of it but it makes remarkable sense and such a simple idea. As for Pinterest, I actually get quite a few views from that site, but never gave it a thought regarding making money. Well done my friend; thank you for the great information.

blessings always

bill


kidscrafts profile image

kidscrafts 3 years ago from Ottawa, Canada

Wouaw! What a great hub, Jo!

I never heard of peer to peer lending! It's interesting and I can understand that some people try to be creative because they got frustrated with the banks! Those guys never lose money.... if they lose, they receive money from the government.... we should be so lucky ourselves!

I started to watch the video about Pinterest; it's seems quite interesting as well! I will try to watch it with my husband. I like also your explanation to create an option of opt-in toward the web site! Very clever!

Thank you very much for sharing all that information here on hubpages!

Definitely, voted up, useful, interesting and just awesome!

Enjoy the rest of your day!

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