Secured vs. Unsecured Loans

Which loans are better for beginners?

Unsecured micro loans are a much easier investment for someone starting with P2P lending. This strategy is, however, only suggested on top-rated P2P lending platforms. The lower the rating of a platform offering micro loans, the higher the risk.

Is secured peer-to-peer lending better?

Secured peer-to-peer loans are suitable for more experienced investors who have the time to access and review individual secured loans. There are pros and cons to both secured and unsecured loans.

What are the risks of secured P2P loans?

There are always risks to consider when investing in secured peer-to-peer loans. Platform risk, market risk, geopolitical risk, as well as borrower risk should be considered when investing in secured loans.

What are the risks of unsecured P2P loans?

The biggest risk is that the lending company will not be able (or unwilling) to return the money to investors. Lender risk is therefore one of the most significant risk factors when investing in unsecured micro loans.