In these hard times the number of people who are taking out payday loans has greatly increased, and until now this is usually a service that has only been of benefit to people who need money.
Now however, people with savings are being attracted to a company which is offering some great interest rates in turn for loaning this money to other people. Incredibly, the short-term interest rates on some of these loans can be as high as nearly 2500 percent.
This is a brand-new form of peer-to-peer lending and it has been established in the name of the company The Lending Well. This is a way for borrowers to bypass banking institutions and go directly to the people who have the money.
The money advice website, Candid Money was founded by Justin Modray and he has commented, “By utilising the service you are not saving in the traditional way, instead you are actively becoming a payday lender. This is something that many people are not exactly comfortable with.”
These interest rates are going to be very appealing to people as banks are currently offering very low rates. However, it is important that people do realise that by investing in the schemes, they are not going to be entitled to compensation from the government if the company goes broke.
The company which has established this lending scheme is only going to be offering money at very high interest rates over the short-term. These companies have come under a great deal of criticism lately as they are seen as a way for people to become trapped into debt.
However, The Lending Well, is going to be running credit checks on the people it lends money to, which is much more than many of the companies currently on the market do.