Peer-to-peer loans (sometimes called “P2P loans”) are a kind of loan made through websites that match individual lenders with borrowers. They are done without a bank being involved in the process.
Q. What is Capital Gains Tax?
A capital gain is the difference between the price you buy your asset for and the price you sell for. When you make a profit on an asset, you may have to pay tax on it. In this instance, you may make a profit through accruing interest or selling a loan, so you may have to pay tax on this profit. To learn more about Capital Gains Tax, read our helpful glossary page!
Q. Is a peer-to-peer loan a formal loan?
Whilst there are no banks involved in the loan, they are formally contracted and are not the same as just borrowing money from a friend or family member. They should not be entered into lightly, though they can be a good choice for some.