Secured vs. unsecured P2P lending.

Secured and unsecured P2P lending represent two distinct approaches within the realm of peer-to-peer lending platforms. Secured P2P lending involves loans that are supported by tangible or digital assets, such as real estate, vehicles, or cryptocurrencies, serving as collateral. In the event of a borrower's default, the lender has the option to take possession of and sell the collateral to recoup their invested funds.

In contrast, unsecured P2P lending does not necessitate collateral. Lenders evaluate the borrower's risk primarily based on their creditworthiness and financial history. In instances of default, lenders often resort to legal procedures for debt recovery since there are no specific assets available for seizure in the event of non-repayment.