A peer-to-peer (P2P) lending platform may best be described as a middleman between you, the investor, and the borrower.
On the face of it, a P2P lending company may look like merely a website but each one is a series of nuts and bolts that aim to create a solid environment for your investment.
Like everything P2P, platforms come in many different shapes, sizes and formats which may make certain ones more or less suitable for your investment depending on your requirements.
A P2P lending platform may have many different hats to wear depending on the type of platform they are and the type of product that they offer.
Simply put, if you’re the chef and the borrower is the diner, the P2P platform is the waiter. Their job is to match your investment to the right borrower or to continue the catering analogy – get the right meal to the right table!
Again, this may all depend on the type of investment you’re making, what platform you’re investing through and what product you’re investing in.
If you’re investing with an account-based P2P platform or product such as some of those offered by Ratesetter, they’ll be the ones who anonymously match borrowers to investors. In an account based investment, all the credit and suitability checks will be made by the platform and not by the investor – a bit like a financial cupid. 
Other platforms, such as Archover may offer self-select options which allow you to choose who you’re investing in in a more specific way. For example, you may have access to various pieces of borrower information and credit history in order to make an educated investment decision.
In a nutshell, with self-select platforms the risk is assessed by you and in an account-based platform the risk is assessed by the pros. To find out more about account-based and self-select P2P, check out our blog on that very topic here.
The platform may also aim to secure your investment against defaults should the borrower fail to repay but, as with all things P2P, this varies between platforms.
Some platforms such as Assetz Capital offer a provision fund which provides a discretionary security measure against the investment to secure it if a borrower defaults or an investment is under some form of threat. To read more about provision funds and other security measures, check out our blog about just that here.
That’s the tricky bit! As each platform offers a very different approach to both their lending and borrowing it may seem a little confusing if not somewhat daunting deciding on which platform may be best for your investment.
That’s where the Fundshare P2P comparison tool comes in. All you have to do is tell us about the type of investment you’re looking to make and we’ll match your specifics to a number of platforms so you have all the information you need to make an informed choice.
Ready to start your search? Head over to the comparison tool here.
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