P2P investments – an untraditional opportunity to invest

Have you ever thought about how much banks and lending companies earn on interest in the provided loans to their customers? Nowadays you can so to say become a bank.

What is P2P?

P2P is the opportunity to take your piece out of the market. P2P literally stands for peer to peer, in this case, it means that you can lend your money to people that need it. The people and investing companies together collect money for the investments to the debtors. The investments are divided according to purpose, amortization method, issue date, countries, loan originators, ratings, etc. By using ratings, you can easily find out the risks you face. A means the low risk with B the risk increases etc.

What are the benefits?

You can benefit from much higher interest rates than on saving accounts, on accounts in banks, or on term deposits. Interest rates about 10 % or more are usual for P2P and you can hardly find such interest rates with low risks, as P2P loans have. Important here is that on P2P platforms you can so much benefit, as you can invest in countries that have extremely high-interest rates, therefore, it is benefiting for the people from such countries to borrow money this way. Or you lend your money to people that need to finance their business, or for some reason could not get the loans from the bank. Sure, now you hear the alarm.

Are there any risks for me?

The risks to lend money to such people are higher, but many P2P platforms offer to buy back guarantee what lowers the risks of getting your investments with your interest rates. There are loans without this buyback guarantee that offer high-interest rates, but along with that high risks come, too. The variety of possible investments in peer to peer are great. As, there are possibilities to invest in business loans, real estate loans, car loans, personal loans, agricultural loans, and many others. On the P2P platforms, you can filter the investments you are interested in, and you can filter for instance just the agriculture investments. Besides that, you can check, the info provided, so you can decide if you want to lend money to the debtors based on age, job, or purpose of the loan. Furthermore, you can invest in the loans during the investments and check the schedule of installments whether it was paid on time or not.

How can I start investing with P2P?

Most of the P2P platforms offer a tool that invests your money automatically. It offers you predefined strategies or you can create yours according to your desires, thus you save time by checking all the investments and finding the one you want to invest in.

However, P2P platforms have appeared on the market quite recently and risks of going bankrupt or changing law regulations are part of that. As in the investments, if the company where you invested goes bankrupt the same it is with the P2P companies. Nevertheless, it is a great option for how to invest your money nowadays. Important is to keep up with the opportunities to grow your wealth and so the P2P investments should become part of your portfolio, as it offers good interest rates with quite low risks.

We give you direction now it's up to you to decide what options seem to be reasonable to you.