P2P Lending Vs. Stock Market – Which One Is Better 

Are you confused about picking one between P2P lending and the stock market? If yes, then this article is your ultimate solution. In this era of the digital revolution, everyone is dreaming of increasing their sources of income by doing online trading or other ways. Although we have an extensive range of options, finding the legit and authentic way of income is still challenging.

That’s why many people want to go for either P2P lending or stock trading because they are not new and trusted by a large number of investors for years. The only difference is that they have no virtual presence in the past, and now you have several platforms for stock trading and p2p lending online.

In this article, we are going to discuss both of the trading methods so you can evaluate which one is better for you. 

Stock Market Vs. P2P Lending – Comparison 

Stock Market

When you purchase a stock, you will get the company’s fractional ownership to earn money by using the following two methods. 

You can make money by investment via asset appreciation. It means that if the company is doing well, its valuation will enhance. So, it permits you to sell shares at a greater rate than you have purchased.

Moreover, you can also earn money through dividends. In this, the company shares a fixed profit with its shareholders. 

P2P Lending

In the case of P2P lending, you give your money to companies or individuals to borrow, and then you earn money by getting loan reimbursement along with interest. 

Stock Market VS P2P lending 

In P2P lending, traders have the right to screen the borrowers prior to investing, and the same facility is also available in the stock market. 

In addition, the investors can differentiate their loan portfolios, and it will alleviate individual loans exposure. In the stock market, traders can also differentiate their stocks portfolios to keep the exposure to individual stocks low.   

If you invest in P2P lending, it shows you own the debt collection. Comparatively, in the stock market, you own a company’s portion. 

In P2P lending, the source of your earning is the loan repayment and the interests related to it. While in the stock market, the money comes from asset appreciation or dividends payments. 

Moreover, P2P lending is predictable because you know how much return you will get. But in the case of the stock market, you don’t know the return because you have to know an idea about the stock’s rate of return. 

Advantages of P2P Lending ( Disadvantages of Stock Market)

To make the picture clear here, we will discuss the advantages and disadvantages of both types of trading. So, let’s get a start with the benefits of P2P lending or, in other words, the drawbacks of the stock market. 


Compared to the stock market, P2P lending has less risk associated with it. In addition, in P2P lending, volatility is also short-run. Especially if you want to make a short-term investment, the stock market will indeed prove highly stressful to you because it is immensely unpredictable and volatile. 

A Convenient Option For Beginners

In the case of P2P lending, the minimum investment is quite less; therefore, it is relatively a better choice for beginners. Also, the P2P platforms are pretty easy to use and demand minimal effort. When you select the investments actively, it will surely assist you in learning more about investing. 

Less Sensitive

Stock markets are highly prone to geopolitical issues, economic factors, and several other things. On the other hand, P2P lending is quite resilient and is more stable. 

Disadvantages of P2P Lending (Advantages of Stock Market) 

Stock market also has some advantages that you need to keep in mind before diving into it. Here we will elaborate on all of them. 

Long-run Returns

The stock market usually has long-term returns, so if you are a patient person who can wait for an extended period, you should surely go for it. While 

Liquidity Is High

The stock market allows you to withdraw your capital whenever you want. On the flip side, in the case of P2P lending, you get money in the form of interest and installments. 


The stock market is older compared to P2P lending, and many investors have been involved in it for centuries. But P2P lending is relatively new and was discovered just two centuries ago. There is a long way to go for getting users’ trust, like the stock market. 

Final Thoughts

To sum up the article, we must say that the stock market and p2p lending have some pros and cons. Before landing into any of them, it is imperative to do complete research. If you start trading without prior knowledge or experience, then there is the huge possibility that you have to go through many hurdles. What is your favorite P2P lending or the stock market?

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