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Top 9 tips to ensure that your investment will reap profits

Jul 17, 2020

Do a quick Google search on the most popular way to invest your money in 2020 and you’ll surely encounter this term: P2P lending. This method is gradually gaining popularity within the Philippines, mainly because of the known financial returns you can get when you invest in a P2P platform. Especially at a time like this, while we are still fighting against a pandemic, it is important to make money aside from the traditional way of earning it.

In this article, you will learn essential tips and tricks to make the most of the P2P lending investment process.

What is a Peer-to-Peer Platform?

Also known as peer-to-peer lending, P2P lending utilizes an online framework with a goal to serve as a bridge in connecting lenders to borrowers, without having a banking institution acting as a middleman. In comparison to other traditional investment strategies, P2P allows lenders to get a higher interest rate, while allowing borrowers to get loans with lesser requirements than banks.

A P2P platform, on the other hand, is the venue that allows lenders and borrowers to meet. In the best cases, these companies screen both borrowers and lenders meticulously, to ensure that they are on par with the standards that minimize risks for both parties. At the investor standpoint, a P2P platform will give you the power to fund various loans and receive profit from the interest that you set.

Tips In Being Successful In A P2P Platform

  1. Start by doing your research.

More than other decisions that you go through in life, any financial investment must be approached with caution. Since you are dealing with your finances, there are some considerable risks involved. How can you protect yourself? Do your research. Get all the information that you can about the platform that you want to partner with. Educate yourself on the concept of P2P lending and the best P2P lending sites in your country. Most of these are highly accessible through the internet; you just need to spend time in reading through them.

  1. Be patient and do not rush.

In investment, just like other money making techniques, it is crucial to be patient. Enjoy your journey in investing on various loans and play around with different loan types. Don’t rush yourself in pouring all of your money in one basket and also be patient until the time comes to reap your harvest.

  1. Choose investments with longer terms.

Just like being patient, you can maximize your earnings by going with loans that have longer terms. Usually, by doing this, you can bump up the interest rates a little higher, therefore, making you earn much more. So, if the money you invested will not have a short-term use, go for lending for a longer term to reap more rewards.

  1. Diversify your investment.

Have you ever heard the adage, “Do not put all your eggs in one basket.”? That’s what you should do once you become a P2P lender. In lending, diversifying your portfolio would do you good as it decreases the risk on your investments and limit the damage that might hit you in case of problems. Many P2P lending platforms offer a few loan types that you can choose to invest on, so playing around and investing on two or more of them can give you a grasp of how each one works. Later on, you can opt to focus on the loan types that you find most profitable and fit for you.

Photo c/o Lynda

5. Be prepared to deal with risks.

Risk is a normal part of life – it is present in all aspects, not just in the financials. So, more specifically, financial investments come with their own risks, even in a P2P lending format. They are unavoidable and it is impossible to eliminate them entirely. However, with education and caution, investors can apply several steps to help minimize them.

6. Don’t be too passive.

In the world of investment, it is essential to do everything you can to maximize your returns. Sometimes, this would mean not being too passive in your approach. Monitoring from time to time will help you in setting your expectations on the returns and it will also help you make the most of the features offered in your P2P lending platform. 

7. Reinvest the interest you earn.

After your initial P2P lending investment term ends, you will be able to reap the profits for your first time. Of course, you now have the experience of how everything works and you are more knowledgeable on its ins and outs. Our best advice is to reinvest your money, because this time, you can correct your initial errors and form a better investment strategy.

8. Act quickly and intelligently.

When you are lending in a P2P platform, you gain access to a list of loans that you can finance. Depending on the service of the platform, it can be through bidding, a first come first served basis, or platform-driven allocation. Whatever it may be, it would do you good to act quickly and check back regularly, so that you can get dibs on the most attractive loans that will give you the best profits. Take the opportunity to select among available loans to fund as a challenge or a competition, so that you can enjoy the journey of finding great matches. 

9. Start being a money lender now. 

Finally, our last advice is to take the leap and start P2P lending now! There’s no time like the present to jump on an opportunity like this, especially when peer-to-peer borrowing and lending are climbing up the popularity charts. Whether you try it out or not, P2P lending is here to stay – and the sooner you start investing, the faster you will receive earnings from your portfolio.

Begin your investor journey with the Philippines’ best peer-to-peer lending platform, Blend PH.

Blend PH is the perfect vehicle to partner with for your P2P loan investment venture. It seeks to bring Filipinos to a safe financial exchange space, whether you are a borrower or a lender. Interested? Learn more about our investment options here.