What are the risks associated with P2P lending?

Modified on Mon, 8 Apr at 8:48 PM

  • Default Risk: There is a risk that borrowers may default on their loans, leading to a potential loss of principal for investors.
  • Platform Risk: P2P lending platforms may face operational, regulatory, or technological risks that could impact their ability to facilitate loans effectively.
  • Illiquidity: Unlike traditional investments like stocks or bonds, P2P lending investments may have limited liquidity, meaning it could be challenging to sell loans and withdraw funds before the loan term ends.
  • Regulatory Changes: Changes in regulations governing P2P lending could affect the industry's landscape and impact both borrowers and investors.

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