Investing through Peer-to-Peer Lending
Peer to peer lending through Patch of Land, Inc. shares a commonality with REIT or Real Estate Investment Trust, in that both are vehicles for investing money in real estate. However, the similarities end there.
With Patch of Land, the investor has the freedom to choose which real estate loans to invest in; whereas in REIT, investors entrust their capital to the institution that offers REIT, without being given the option to choose which property to put their money into.
Patch of Land can be thought of as a personal REIT, wherein the investor makes the decision of which real estate to invest in. The interest earned from peer-to-peer lending is considerably higher compared to interest earned from a treasury bill, certificate of deposit, a bank account, and many types of bonds.
Peer to peer loans allow borrowers quick access to money from other individuals (i.e. their peers) without going through large financial institutions which are typically overregulated and take a long time to process. As a result, Peer to peer lending is faster and more efficient than traditional lending methods.
For the benefit of first-time investors, this type of investment is also known as crowdlending. Crowdlending is gaining momentum due to increased security measures used for transferring funds online, as well as the constantly expanding reach of the Internet. It's the ideal way to get access to funding for capital, or production costs, because it provides access to investors whom they normally wouldn't be able to reach. With many peer to peer lending sites beginning to launch, investors and borrowers are advised to take precaution and make sure the site they choose to partner with is legitimate, transparent, and fair.