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8 Types of Alternative Lending Models and Companies Powering Them

Alternative lending companies almost took over the lending business by storm, leaving few options to major players. Realizing the possible loss in a race for the profitable service, banks have joined hands with alternative lenders and even saw a great opportunity in financially fueling the loans originated by competitors.

While we look at the alternative lending as a whole segment, it actually is a complex ecosystem consisting of eight types of alternative lending businesses.

P2P lending

The best-known type so far is P2P lending. There is a wide range of companies successfully operating in a subsegment to democratize lending. P2P lending is built as a marketplace where individual borrowers take unsecured loans from other individuals. The model allows individuals to access low-cost quick loans at a rate they can afford.

Examples of companies offering P2P loans: Zopa,

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