There is one alternative approach to lending these days – P2P. P2P lending is actually gaining popularity because of its many benefits both to investors and the borrowers. Basically, P2P allows individuals or businesses to lend or borrow money directly from each other. It is more efficient because it removes the middleman thereby eliminating financial intermediaries.
If you are an investor, you can choose how much you want to invest. There will be a P2P platform like HittaSMSLan that can facilitate easy matching with ideal borrowers. Your job is to review the applications and finally decide whom you want to financially support. Through this, you are boosting returns for borrowers and reducing interest rates.
Without a doubt, P2P lending provides an excellent opportunity to dip your toes into investing. To create a more stable financial future for yourself as an investor, it is imperative that you know how you can benefit from it. Here’s a list:
It is quick and easy
Many people are interested in investing but they are easily intimidated by how complicated the market is. Aside from understanding the jargons, you need to be familiar with every aspect so you can read the numbers and know which companies are best to invest. This means that you need to be very knowledgeable to get started.
When you consider investing in P2P, you do not need to be a business specialist to get started. The application, for instance, will take less than an hour and after that, you can get started. You do not need to learn about financial jargons or read the numbers to be successful in this field.
It needs less capital
With P2P loans, you do not need a lot of money to start investing. You can start with how much extra money you have and work your way up. This will give you the opportunity to test the waters first before you dive right in.
It is better than a regular savings account
You can choose to store your money in a regular savings account but it will yield lesser interest at the end of the day. The regular savings account only offer 1-2%. In P2P lending, the interest rate is more.
It offers high ROI (Return of Investment)
If you will look at the average returns, P2P lending offers more. For real estate investments, the average return is around 6.5% while investing in stocks is around 7%. In P2P lending, it usually offers ROI of about 8% to 13%.
It is a good way to earn passive income
If you do not want to have only one income stream, P2P lending presents a good opportunity to earn passive income. Having multiple income streams can make a difference in case you lose your job or you cannot work anymore.
It can help people
More importantly, you can take the high road and help other people. Getting a loan from banks is difficult for those who have no credit history. The good thing about P2P lending is that you have the flexibility to choose what type of loan to offer and how much money you want to lend. At the end of the day, you are helping many people in need