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Why Peer-to-Peer Lending Could Be a Good Investment Choice Are you looking for better returns? Think about peer-to-peer lending.

By J.D. Roth

Opinions expressed by Entrepreneur contributors are their own.


Like most entrepreneurs, I'm a risk-taker. It took guts to quit my day job to start my own business. And it takes guts to keep at the business even when my income drops.

But when it's time to invest the money I've risked so much to earn, I like to play it safe. Most of my retirement money is in index funds and municipal bonds. I'll never earn spectacular returns this way, but I feel confident that I won't suffer catastrophic losses either.

Still, the entrepreneur in me is always looking for an opportunity to earn a greater return with reasonable risk. Recently I've become intrigued with the idea of investing some of my money in peer-to-peer (P2P) lending. P2P loans are unsecured personal loans made with the help of a third-party intermediary. The internet has made this practice much easier, with companies like Prosper and Lending Club matching borrowers to investors.

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