5 ways to create a passive income stream - 4/5

Peer-to-peer lending - BARBARA DIGGS

A peer-to-peer loan is a personal loan made between you and a borrower, facilitated through a third-party intermediary such as Prosper.com or LendingClub.com. As a lender, you earn income via interest payments made on the loans. But because the loan is unsecured, you face the risk of default.

To cut that risk, you need to do two things:

1. Diversify your lending portfolio by investing smaller amounts over multiple loans (Prosper.com recommends more than 100).
2. Analyze the historical data on the borrowers to make the right picks.

The time it takes to master the metrics isn’t the only reason P2P lending isn’t entirely passive. Because you’re investing in multiple loans, you need to pay close attention to payments received. Whatever you make in interest should be reinvested if you want to accumulate interest.

LOAN SEARCH: If you’re not ready to invest, you can borrow from a peer-to-peer lender – check out personal loan rates with LoanMatch.

Be on the Lookout for my next Blog for more Passive Income Strategies!!

https://www.bankrate.com/investing/realities-behind-creating-passive-income/#slide=5

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