5 Signs you are ready to take advantage of P2P lending returns
Peer to peer lending investment returns have shaken the world of traditional finance, with investors gaining far higher returns than they would get with savings accounts. It has also made loans more accessible than ever before, bypassing the banks and other lending institutions.
In fact, over the last decade, this industry has presented both investors and borrowers with an alternative to banks. Through the use of P2P lending platforms which facilitate online borrowing transactions, there’s no need to wait for banks to approve loans, or deal with high bank interest rates. Globally, P2P lending was already valued at $3.5 billion back in 2013. And given the market’s growth today, experts predict that this number will rise to $1 trillion by 2025.
In short, P2P lending can be an invaluable addition to your portfolio. And if you feel like you’re ready to earn some strong peer to peer lending investment returns, here are some signs you should look out for.
Sign 1: You’ve done the research on peer to peer lending investment returns
Knowing the peer to peer lending bad credit is a good sign that you’re on the right track, especially if you want to start investing. Today, there are two types of P2P lending: traditional and crypto-backed. All you need to start peer to peer lending investment returns are a bank account and a platform for lending out money to borrowers. You deposit your funds to the platform online, check it for loans that match your interest rate and default risk, and then fund the loan to start earning interest.
On the other hand, crypto-backed loans are a form of collateral-backed lending. While banks take things like cars, houses, and other assets as collateral for loans, this type of lending requires borrowers to put up cryptocurrency as collateral. Crypto-backed lending works similarly to traditional P2P lending, except that they’re lower-risk.
For investors, its main disadvantage is that you can’t charge high interest rates. At the same time, it also requires a lot less risk assessment as loans are backed up by a strong asset. And this can be very helpful if it’s your first time investing in loans.
Sign 2: You’ve settled your personal finances
Another good sign that you’re ready to start is if your personal finances are settled. This means that you’re up-to-date on any bills or payments that you’re responsible for. Credit card interest rates can be extortionately high which could make any investments less valuable since your gains would be going to cover more debt.
If you’re in debt, consider consulting a financial planner. P2P loans can be a way of consolidating your debts – but only as part of a responsible financial plan.
Once you’ve done all that, you can then look at generating peer to peer lending investment returns. Take the time to review the options that suit your financial situation best. Different platforms offer different levels of P2P lending returns, with MyConstant offering up to 9% APR.
Sign 3: You’ve outlined your goals with peer to peer lending returns
Outlining your short and long-term financial goals such as paying off debts, planning for retirement, or earning a passive income can help in choosing the right investment strategies. Your goals will determine how much money you need to spend, how much interest you can earn, and your timeline for earning certain amounts.
You can also leverage the flexibility of the peer to peer lending investment returns to quickly achieve or even adjust your goals. With MyConstant, for example, you can decide how long you want your investment to be. We offer 30-day, 90-day, and 120-day terms, which can be extended.
If you need to pull out of an investment early, you can sell the rights to earning from the interest on crypto on a secondary market. You can also buy the rights to other loans, which will allow you to earn without having to invest and finance the loan throughout the entire term.
Even loans with fixed-term investment periods can be bought and sold on a P2P lending secondary market.
Sign 4: You’re aware of the risks of P2P lending investments
As with any investment, P2P lending comes with risks. After all, it is the risk factor that helps to boost peer to peer lending investment returns and beat the interest on your average savings account. But you can minimize these risks by sticking to crypto-backed lending.
In fact, some lending platforms require borrowers to put up to 200% of the loan in cryptocurrency as collateral. This means that even if those borrowers default, you won’t lose a cent. You can even invest any earned cryptocurrency in interest-earning crypto wallets.
In short, investing in crypto-backed P2P lending is a lot less risky than investing in the stock market or real estate.
Sign 5: You’ve found a P2P platform you trust
If you’re positive on all these signs, the last piece of the puzzle is finding your preferred P2P platform. Ideally, it should be one that’s compatible with a wide variety of online banking platforms. It should also allow you to earn a reasonable amount through peer to peer lending investment returns.
You also need a P2P platform with flexible features that can be aligned with your goals. Here are some factors you should consider:
- Level of interest you can earn
- Length of terms
- Minimum/maximum deposits
- Regulations in your state (Some have restrictions on investments)
One of the new trends in P2P lending is the rise of crypto-backed loans, where loanees put up their crypto as collateral. It is an exciting, new field of investments which gives you even more opportunities to grow your peer to peer lending investment returns.
MyConstant is a crypto-backed lending platform that can give you all this with very little risk involved. We allow you to lend either USD or cryptocurrency to borrowers around the world – at an interest rate of 9%. And because all loans are backed by cryptocurrency, MyConstant’s default rate is extremely low. In fact, no investor has lost a penny since the platform launched in 2019. If you are considering lending money online, P2P lending can be a lucrative way to make some cash.
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