What is P2P Investment & Who Can Benefit?
The main questions I get asked when talking to people about P2P are: What is P2P Investment, who can benefit from it and which companies should I use… If this is you, read on!
What is P2P Investment?
The name suggests this is essentially a way of cutting out the middle man …
Essentially connecting investors with borrowers.
This may sound like a great idea on the face of it. In practice this is quite a scary concept. You know yourself how friendships can be lost so easily over the lending of money. Therefore, imagine a stranger defaulting on his or her loan. How annoying would that be and how on earth would you choose who to trust.
With peer to peer lending this simple connection has been complicated somewhat by the introduction of loan originators and the P2P lending platforms who connect the investors to them.
Along with this complication though, comes a layer of protection.
Which Peer to Peer Lending Companies?
Before deciding where to invest you need to decide what your goal is. What % return you want to achieve and how long you want to invest your funds for.
Shameless plug here, but if you sign up for my FREE Step-By-Step Guide you will see that I review several of the top players for you to start your research.
Or go to my hidden link here to find out which P2P Platforms I use and what I think of them.
What is the Risk?
As with every type of investment, there is a risk that you won’t get back what you put in. How much risk is involved in P2P is largely down to the choices you make.
In general terms, the higher the % interest gained, the higher the risk.
In all of the investments I have made, and all of the platforms that I provide affiliate links to for you to explore, there is a Buy Back Guarantee offered. This means that if a borrower defaults on their loan then, after a determined period, the money you have invested is returned in full.
This means the interest you have earned to this point is safe and your initial investment is safe, however, you lose the potential future interest and of course some investment time whilst you wait for this to all happen. All in all though, it’s a good thing.
How am I Doing?
I publish the status of my portfolio on a monthly basis at the end of each month as an overview.
If you are interested in seeing my progress check out the links below: