P2P lending is making waves in the international financial technology market. Should you ride the tide or go with the flow?
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Financial technology is one of the most impressive innovations within the recent years. Within these fintech companies, experts see one thing as the most promising: P2P lending. According to recent studies, peer-to-peer lending is something that government see as the perfect vehicle to help assist individuals who do not have the access to work with banks.
In this article, we will look at the opportunities that await P2P investors as well as the reasons why they should explore this kind of investment.
But before we dive deeper into that, here is a quick overview on how the peer to peer lending process works:
- First, a borrower will create an account in a P2P lending site. They will provide the necessary documents to prove that they meet the requirements to obtain a line of credit. This process won’t take too long and can be accomplished within a few minutes if they have their documents at the ready.
- Then, the P2P platform will be utilizing this information to assess the applicant. The information collected will help the platform weigh in on the credit rating of the borrower and the extent of the risk it would be to lend them funds. This stage is also when the P2P site will designate the appropriate interest rates for the buyer.
- Should the application be approved, the applicant will be able to identify the actual loan that they need. Basically, the borrower will now be connected to the lender, based on the criteria set by the P2P platform.
- This talks about the other side of the platform: the investor. Similar to a borrower, an investor will also create a profile on the P2P lending site. On their end, they also have to provide proof of their financial sources, to ensure that the money is clean and is not linked to any illegal activity.
- One the application is approved, they are now free to fund their wallets and find loans to fund. It can be an automatic matching made by the site analytics, or it can be that the lenders have the power to bid on all open loans.
- Because of these functions, the P2P platform collects a fee for facilitating the transaction and other related services.
Reasons To Invest In A P2P Platform Now
- People are seeking alternative finance
A lack of access to credit lines remain to be a considerable problem by countless individuals and small businesses. Especially at a time where businesses are hit with market and consumer behavior changes, having a liquid cash flow is essential to keep their companies from going under. According to the International Financial Corporation, the need in Asia and the Pacific alone amounts to 2.38 million dollars. P2P is perfect for this chunk of the market because its technology helps in monitoring risks and returns better while offering rates that are way lower than others.
- P2P platforms are very flexible
Unlike other forms of investment, P2P lending gives investors a greater power to maintain flexibility and control. Risk can be drastically reduced by spreading out the fund into several loans instead of focusing on just one.
- P2P lending offers a significant social impact
Taking part and investing through a P2P platform can also be seen a huge contribution in helping the economy and the market to stay afloat. By giving them funds, you help individuals and small businesses to provide employment, their unique products or services, and stimulate the important spirit of entrepreneurship.
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Opportunities That Await If You Pick P2P Lending As Your Next Investment
- Explore the opportunity to reap an amazing yield
Compared to traditional financial investments or the average savings account, investors will surely appreciate the returns that they can get when they invest in P2P lending. Usually, you can get 2 to 3% returns. But, with many P2P platforms, you can enjoy up to 10% to 12% in profit per year.
- Enjoy steady and consistent returns
Compared to other forms of investment, trying out P2P lending is a lot calmer than investing in volatile markets with high risks. P2P platforms pride themselves in mostly maintaining a consistent cash flow through having a strict set of qualifications or screening process for their borrowers.
- Linkages with high quality borrowers
Imagine lending out money to random people without having an idea if they can pay you back. Scary, right? The great thing about P2P sites is that they create an application program that will filter out unqualified people from getting access to loans. The best P2P platforms allow different types of options and different interest rates, to evaluate their pool of borrowers even better.
- Chance to minimize risks in investment
Because you have a platform checking out your every move and doing security for you, investment risks are better controlled within P2P lending platforms. These companies also operate transparently, in a way that they will let you know the levels of risk, so that you are prepared no matter what happens.
- Opportunity to diversify your portfolio
If you want to experience having a diversified portfolio, investing in P2P loan investments is one of the best choices you will ever make. As you can divide your funds into different loan types in different niches, you minimize the chances of losing all of your investment in case one markets experience a hit.
Why Wait? Invest in P2P Lending with Blend PH now.
P2P leading is climbing the ranks in becoming the best financial technology of our time. They give a good impact to the economy and their returns on each investment is very competitive, as well. So, what are your waiting for? Start by investing your time by learning about the passive income opportunity that awaits when you partner with Blend PH.