So you’ve heard about peer to peer lending. You’ve heard that it’s becoming more and more popular. You’ve heard that people have gotten great returns from them, and you’ve been told you can too. But can never be too sure. Is it really for you? What can you really get out of P2P lending?
Solid returns. This one has been mentioned, but it can’t be stressed enough. After all, all kinds of investments are motivated primarily by returns. And as far as peer to peer lending goes, investors get great returns. At an average, we’re looking at 14% interest rates. Taking into consideration losses, fees, and other contingencies to a total of 3-5%, you’ll still be left with around 7-8% in profits, which is really great compared to the minimal interest you get from traditional banks that don’t even go beyond 1%.
The high interests are thanks to the absence of regulations that restrict the freedom of people who want to contract loans. And so far, there have been very few cases of borrowers defaulting. In fact, the success stories from peer to peer lending are more prevalent.
Consistent lending. With lots of people rushing into peer to peer lending, you’re sure to have someone to invest your money in for great returns. Investing in people, after all, is very different from investing in companies that could rise and fall. While you will be dealing with people who have not so good credit rating, you will be equally enjoying the consistent benefit of lending to high rated creditors.
In fact, peer to peer lending has been proven to have done better as an investment solution than the stock market, which has shown steady default rates throughout the years in most cases. If you look around, you’ll learn that P2P borrowers do pay back more than they don’t.
Enjoy more control. Peer to peer lending allows investors more freedom and flexibility to manage their funds and accommodate borrowers otherwise not allowed under banking regulations. This means that wise investors will be able to push the ceiling of their returns, allowing them to earn more than any traditional bank would ever let them.
If, for instance, you notice that a certain class of borrowers offer better returns or have a better rate of paying back than others, you can easily focus all your investments on those borrowers. You can’t do this with banks because you don’t always get to even meet the people who borrow your money. If you’re the kind of businessman who enjoys having control over his investments, then peer to peer lending is the sure way to go.
Maximum liquidity. One more thing about peer to peer lending is that you’ll eventually be able to liquidate your portfolio when you feel the need. This is because peer to peer loans are considered as securities that can be sold for value. All you need to do is find a market that buys these securities and you can make a profit out of your well built portfolio. This is yet another edge P2P lending has over the stock market, seeing as how stocks can take forever to have returns at times.
This is just one of the few benefits you can get from peer to peer lending. You can only expect more when the market grows.
Learn how peer-2-peer lending from MoneyEgg.com can increase your crucial retirement fund? Visit the MoneyEgg website now – http://www.moneyegg.com
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