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Crowdfunding vs. Crowdlending: Key Differences

Crowdfunding and crowdlending both harness large groups of people to raise capital online, but they serve different purposes:

• Crowdfunding pools small contributions—often as donations or in exchange for rewards (e.g., early access to a product). Backers support creative projects, charities, or startups without expecting financial return.

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  Crowdlending (peer-to-peer lending) connects individual or institutional lenders to borrowers seeking loans. Investors receive periodic interest payments and principal repayment, transforming backers into creditors rather than donors.

While crowdfunding emphasizes community support and product pre-sales, crowdlending functions like a mini-bank, offering borrowers competitive rates and lenders steady yields. Choose crowdfunding to validate ideas; choose crowdlending to earn interest.