5 Popular Uses of P2P Finance for Borrowers

15 June, 2015

Here are five uses of P2P funding that have gained a lot of popularity with borrowers recently.

Refinancing
Refinance more expensive sources of debt with lower interest rate P2P loans. This is currently the crème de la crème of P2P borrowing on most platforms. Lending Club, the largest P2P platform in the world reported that about 70% of loans were used to refinance debt, about 19% of them alone being for credit cards

Buy property abroad
You can get a lump of cash to make a down payment on a property purchase, or use P2P borrowing to increase your down payment on a purchase abroad to lower your mortgage rate. Considering property price differences between Hong Kong and other markets, you might even be able to full-on purchase a sweet holiday home you like and skip the mortgage!

Renovation
No time to buy another apartment? Maybe you realized that owning one isn’t all fun and games and that unit you have rented out since back in 2003 needs a make over pretty soon. Using P2P borrowing for short term loans to renovate apartments isn’t rare globally, and could likely be a common use here in Hong Kong.

Education
There is probably only one drawback to your child going to their (your?) dream school. It’s the millions in HKD you might have to pay over three / four years to fund tuition, lodging, food, trips home to see family - and the occasional trip to Cancun. While it’s not uncommon for Hong Kongers to bite the bullet and come up with the funds, P2P borrowing might be a cheaper option than crippling student loans, or a more attractive option than selling an apartment, factory, or entire business.

Medical expenses
There are a variety of insurance plans out there, and yours may or may not cover your needs. Some users of P2P borrowing have found that it can be a useful option for funding expenses. These range from medically necessary procedures that are not covered by your plan, to elective surgeries such as liposuction and plastic surgery.

Author: Shehreyar Jamshed, CFA
Disclaimer: The information in this communication has been prepared without taking into account your objectives, financial situation or needs. As such, it should not be construed as investment advice, nor an opinion on the appropriateness of peer-to-peer lending or alternatives for you. All investment and borrowing decisions should be made individually in regard to your own objectives.