The global peer-to-peer lending market will likely secure US$ 1.3 trillion by the 2022-23 forecast period.
With so much money involved with microloans, you might want to consider investing in them. It’s a great way to try out a different investment strategy that could prove successful for you.
Is Peer-To-Peer Investing For You?
Peer-to-peer lending is different from traditional forms of investing that you might take part in normally.
The main difference with investing in peer-to-peer loans, or microloans, is that your money will be funding a direct loan to a borrower. A website will be the middleman for the loan, but you set the terms and fees for getting your investment back. You have the flexibility to profit as much or as little as you want while working with borrowers to get your money back quickly.
An investment in the stock market is much more volatile with fluctuations in values. Company stock values can drop one day and go back up the next, making it difficult for you to know what to buy. Even with people available to advise you on the best stocks to invest in, nobody knows what they will do 100% of the time.
With peer-to-peer investing, there is less guesswork and more consistency with borrowers paying you back. When you invest in microloans, you never have to worry about a company’s value dipping or losing your money to poor market conditions. You have a chance to profit higher on these types of loans compared to the average returns in the stock market.
Peer-to-peer lending might be a good option if you don’t want the stress and complications of other investment classes.
Tips For Investing In P2P Loans
To start investing, you need to find a peer-to-peer microlending website that will pair you up with a borrower that needs your money. Once you start investing, there are strategies you can employ to help you make the most money and stay successful.
The first step to making the most out of your investment is diversifying your portfolio among multiple borrowers. With any investment, you do not want your money to be in one place. Building a diverse portfolio is the best way to ensure you can profit the most.
For microlending, that means you want to take your total investment and break it into smaller amounts so you can invest with multiple borrowers. If one borrower defaults or misses a payment, you’ll have numerous income streams still coming in.
Another strategy to note is that you want to keep your investments organized, so you know everything about your money. With a peer-to-peer lending platform like Lendee, you can check your investments from anywhere, whenever you want. Staying organized will be a great asset to profiting on your investments and making them successful.
One more strategy you might find helpful is setting goals for your investments. It allows you to know what to do with your money. Set goals on how much profit you want to make based on how much you contributed, and you will manage your money better. If you achieve your goals, you can decide if you want to reinvest the money or if the current profits are enough.
If you are interested in peer-to-peer investments, there are multiple platforms you can use.
LendingClub is a larger lender that offers peer-to-peer lending for you to start investing.
They take a typical approach towards P2P loans where you essentially crowdfund towards someone’s loan. You and other investors pool your investments to help fund one large loan for a borrower. The downside to LendingClub is that it takes a long time to get your entire investment and profit back, depending on the borrower’s payment term.
LendingClub’s system is easy to use and can help you begin the peer-to-peer investment journey.
Kiva is a small lender similar to GoFundMe, where people post how much money they need and why they need it. From there, you can decide whether you want to invest your money or not. The difference between Kiva and GoFundMe is that Kiva is a loan while the latter is not, so you will get repaid when investing money with Kiva.
You can invest your money in someone on the other side of the world and help them achieve their goals while turning a profit.
Lendee is a uniquely different type of peer-to-peering lending platform where investors directly lend money to borrowers without having to split earned interests, unlike other platforms.
It allows you to invest up to $2,000 in a single peer. Nonetheless, you can always invest more across multiple borrower portfolios and diversify your investments to make more money.
Using Lendee for peer-to-peer investing is easy and will help you get faster and greater returns.
Start Investing Today!
If you are interested in peer-to-peer investing, check out Lendee to get started!
Just download the Lendee app, join by creating your profile and start investing. You can connect directly with borrowers in minutes to see why they are seeking the loan and how much they need you to invest.
If you are new to it, Lendee can help you make the most of your investments.