Peer lending industry has witnessed tremendous growth in the recent years. Just like an online marketplace brings together sellers and buyers to transact on a single platform, P2P lending is an online marketplace for bringing the borrowers and the lenders together. If you want to invest your money, you can register as a lender, whereas you are looking for borrowing money, you can register as a borrower.
The talk about P2P lending has always been revolved around the borrowers, and the advantages they get out of it. However, what gets skipped is that it also has the potential to be one of the most remarkableinvestment opportunities for the lenders as well.
With interest rates of savings accounts and fixed deposits being on a decline, multiple investment opportunities have come up promising better and higher returns than what the traditional platforms offer. One such opportunity is called peer to peer lending.
P2P lending as an investments aims to deliver multiple benefits to the investors:
An investor should have a diversified portfolio, with investments in various asset class. He should not limit his portfolio to a few asset classes, but also focus on investing across various opportunities at his disposal. By doing this, he is combating the negative effects of market fluctuations on his funds.
A healthy portfolio must have a mix of both, low returns but guaranteed and also high return investments. P2P lending is one of the most profitable asset class, if done wisely.
Steady and high returns:
Returns on PPF and interest on savings deposits are at its lowest these days. P2P lending delivers higher returns which are not comparable and also not linked to stock markets, mutual funds, etc. Peer to peer lending is a new investment that is promising to deliver high returns on investments.
For example, lenders on Finzyare earning huge returns on their investments, and building diversified loan portfolio. Be prudent about when and where to invest, and you are sure to receive significant benefits.
Another reason of P2P investment being attractive is that the investors can have compounded earnings. Lenders can earn the principal amount as well as its high returns, every month. The more you receive these payments, the better are your chances of reinvesting the amount.
This reinvestment of returns, and compound earnings, help the investor to counter the effects of inflation, and hence stands as one of the most valuable investment opportunities.
The advantages of P2P lendingseem to be very attractive. It offering the investors with various opportunities, and empowering them to take decisions based on information and transparency.
However, it is also important to understand the risks entailed in these investments. It is important to be aware of the borrowers and their credit scores, and also the slight risks involved in this investment.
They should be able to plan the finances accordingly. The risks can be mitigated with a smart and informed planning. Even with slight risks and moderate returns, P2P stands as one of the most incredible investment opportunities, and can beat inflation and its unpleasant impact.