Choosing between P2P and Auto Invest? Read this!

Oct 19, 2020

P2P Investment vs Auto Investment: Which Is Better For You?

The modern financial world gave us new opportunities to earn passive income. The best thing about it is that you can do it at the comforts of your home – and most of the time, you can monitor your investment’s progress at the touch of your fingertips. In recent years, you might have noticed that peer-to-peer funding, or what we fondly call P2P, brought investment opportunities closer to our reach. But aside from that, Auto Invest options came out and helped people to get another alternative.

Today, we will look at these two financial solutions. We’ll weigh on each of them, their advantages, and choosing which one would be the perfect one for you.

What is P2P Investment?

Peer-to-peer lending can simply be described as crowdfunding – only this time, through lending and borrowing. It is easier to use for most people because you can access them through online platforms and it eliminates the procedures in the conventional loans process used by traditional financial institutions.

For investors, you will now serve as the financier of loans and your earnings will come from the interest payment each loan will incur, subject to usually small fees from the lending platform. Also, unlike having one person finance a loan, P2P platforms allow a loan to be split up to different parts – it varies on how much you are willing to invest per loan.

What is Auto Invest?

For people who want to invest but typically do not have the time, Auto Invest eliminates the need for time and effort you have to shell out to build an investment portfolio. It is a program that allows you to put in your chosen investment criteria and it will link you to fund the suitable loan to fit what you are looking for. This is easily accessible at any time through the platform but you have to wait for the loan term to complete before you can access the returns on your investment.

Advantages of Choosing P2P Investment

  1. It is a good way to learn about the risk and reward concepts of investment. P2P investment can provide interest rates as high as 30%, which is not something you will get to see in other more conventional types of earning. Having said this, it still comes with a considerable risk. But, learning to manage it by applying good strategies can bring back awesome results in the long run.
  2. With the right platform, you can feel good about your investment because you are on the ethical side of things. Because P2P platforms are fairly transparent, you will be able to enjoy a fair and clear service to the borrowers who will make use of your funds. In your own way, you will also help the common Filipino to get funding for their immediate needs or the fulfillment of their business dreams.
  3. It is also fairly easy to understand and work around. Albeit investing in P2P requires a little reading, it is generally an easier process. The overall application and lending procedures are streamlined eliminating unnecessary documents and the long wait. This makes it even more attractive for many people – especially the more impatient younger generations.
  4. You can get better interest rates. For many P2P platforms, investors can select the rate that they want to set, which means you also set how much you will be earning. Sometimes, the platform will set the interest for the sake of borrowers and lenders alike, but it will remain fair and will be assigned accordingly with the borrower’s requirements and credit profile.
  5. P2P platforms give access to risk diversification which means investors can spread out their funds into multiple loans. This allows them to protect their investment and have a generally safer approach in addressing investment-related risks.

Advantages of Choosing Auto Invest

  1. You can just set and forget. If you are generally a busy person, auto invest allows you to put your money into work and not allow it to be stagnant and fail to generate income. This allows you to grow your portfolio in a subtle and less aggressive way – but the bottom line is that it remains growing.
  2. You are always sure that your investment can generate earnings. With Auto Invest, you get a guaranteed interest rate that will give you your investment returns once the loan matures. Unlike P2P investment where you can get a range of 6% to 30% earning depending on the loan, with a risk of loan default, Auto Invest assures of reaping rewards at the end of the term.
  3. As the ultimate goal in investment is receiving regular income, this option gives you just that. With normal investments, repayments can never be promised. But, with Auto Invest, you are safe with receiving a predictable income that will be consistent to your expectations.
  4. Auto Invest is a hassle-free way to orient yourself into alternative ways of earning. There is no pressure to quit your day job or sacrifice your leisure time for research and monitoring. You can just sit back and relax and let your money and the system do the work for you.

Our expert advice? Try out both with

Like many experts say, the key in succeeding in the investment world is to diversify your portfolio. That means dividing the money you can invest to different types of income generating activities. So, when you sign up to become a investor, make the most of it by setting aside one amount for Auto Investment and divvy up the others to various P2P loans.