Bond investments are similar to p2p in that they typically pay a fixed rate of interest at a specified interval and represent a debt obligation of the bond issuer (with p2p it’s the borrower). Additionally, similar to p2p loans, bond issuers may default on their obligation and cease making payments or the bond may be called or paid off early like a p2p loan.  

However, p2p loans make equal principal and interest payments each month for the duration of the loan. Bonds will typically only pay a coupon payment equal to the interest owed for that period. At the end of the bond term, investors receive a balloon payment with their initial investment and the interest earned for that period. Many bonds are liquid and can be easily bought or sold for their fair market value, whereas p2p loans are not as liquid, and it may not be possible to sell them before maturity. Except for junk bonds (higher risk), most bonds have relatively low rates of return. While p2p is less liquid, in exchange, investors are rewarded with a higher risk premium or risk-adjusted rate of return.

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