Top P2P Platforms for Premium Investors
Peer-to-Peer lending is the concept that allows small payments from hundreds of people to reach the size of one large payment from a wealthy investor. This concept allows investors of all sizes to begin making a profit on their income. It also gives those who are in need of capital and credit an alternative way of obtaining it.
Peer-to-Peer lending is well known for it's approach to hassle-free investing, principal guaranteed, and above market interest rates for lenders.In this blog we will be reviewing which sites are the most enticing for those wishing to invest a great deal of money.
EstateGuru
EstateGuru is a mortgage P2P lending platform. All loans on EstateGuru are backed and secured by actual real estate or first rank mortgages. The marketplace has a minimum deposit of 50 EUR but in order to use their auto-investing tool investors need to deposit at the least 250 EUR. EstateGuru is an incredibly successful platform and promises an attractive ROI.
EstateGuru is another platform that is incredibly effective at ensuring investors principal is guaranteed. The Peer-to-Peer lending service offers loans for rental properties, real estate purchasing, development loans and construction loans. EstateGuru is the marketplace which brings borrowers and lenders. Together, they themselves are responsible for the servicing and health of their lending/borrowing ecosystem. EstateGuru offers a high ROI at a 8 - 13 percent yearly return.
EstateGuru also offers bonuses solely based on percentage. Depending on the investor, this percentage alone should be a huge determining factor when choosing the perfect platform. This percentage isn't on one transaction, but for the first three months of use on EstateGuru. For the purpose of an example, if someone invests 10,000 EUR on EstateGuru, then he would receive a bonus of 50 EUR. Within three months if that same person is able to invest his 10,000 EUR and invests it again, he would have received a bonus of 50 EUR. In comparison to most peer-to-peer lending platforms this is a much more generous bonus.
October
October is a peer-to-peer lending platform that operates out of France. Their platform's purpose is to crowdfund local small and medium size businesses in Europe. Borrowers are business owners who put their businesses up as collateral and the lenders are really anyone who believes in European enterprise.
The minimum deposit on October is 20 EUR. While not being high, it is higher than many other platforms whose minimum starts at 10 EUR, and higher than the few whose minimum starts at only 1 EUR.
October has a strong approach to both risk management and fund recovery. The listings on October are highly vetted to ensure they are capable businesses with a healthy source of income. Borrowers on October enjoy that below market interest rates and borrowers too. Interest rates on October are very low in comparison to the market, ranging from 3 - 7%. On the other hand, October like very few other reputable platforms have never lost their investors funds.
Given October's level of security and below market yearly returns, October makes a great platform for investors with large sums of capital.
PeerBerry
PeerBerry, while being a highly attractive platform for limited income individuals, it is also an attractively profitable platform for those with large amounts of capital. PeerBerry is a loan originator aggregator that specializes in consumer loans but also offers loans in mortgage finance, business finance and auto-finance. PeerBerry has a minimum entry deposit of only 10 EUR but offers special bonuses for investments above 10,000 EUR.
All loans on PeerBerry come with a buyback guarantee and are secured by collateral. PeerBerry has implemented a second layer of buyback guarantees called group guarantees. Buyback guarantees implies buying back the loan from lenders if the loan defaults longer than 30 days. However, in some scenarios the loan originator cannot purchase back the loan because it's the loan originator themself that is failing to manage their finance. Group guarantees pressures the rest of the loan originators on PeerBerry's market place to step in and financially, and resourcefully, support the failing loan originator.
This multilayered security system has made PeerBerry highly profitable as well as very secure for investors. PeerBerry offers a yearly return of 9 - 12 percent on their marketplace.
Reinvest24
Reinvest24 is based in Talinn, Estonia and has a minimum entry deposit of 100 EUR. Reinvest24 offer real estate equity investment loans, which means borrowers provide equity of their real estate property in exchange for a loan. Lenders hold this equity until the rental income from the property pays back the loan amount.
Reinvest24 is certainly one of the more innovative platforms in the peer-to-peer lending space. They were only founded in 2018, making them very young in comparison to the rest of the market. The platform is special for having a very dedicated approach to choosing real estate listings to put on their market place. Reinvest24 to date, has been profitable for investors and as a platform. Regardless of newness, Reinvest24 currently offers a whopping 11 - 15 percent return on investment.
Due to the age of the company and the process by which they choose which developments to offer, they have a considerably smaller marketplace of options. ReInvest24 only has a few options at a time for investors to choose from and invest in.
What to Look For With a Big Portfolio?
Those with much larger sums of capital may not be as interested in long term wealth growth. Rather, it may be more enticing to create a secondary cash flow. Short term loans which finish within 1 - 6 months may be more preferable for the purpose of generating income and retaining liquidity.
While some platforms require loans to sit for 3 - 5 years, other platforms service loans that finish within just a few weeks or even a few days. Those with more than 50,000 dollars may find themselves benefiting from a loan that finishes in 3 - 4 months that gives back 3 - 5% rather than a loan that finishes in 3 - 5 years and brings back a return of 10 - 14% annually. The reason is simple, if you have amassed wealth growth then the optimal strategy is to create a source of income that does not eat into your wealth. If you have not amassed yourself a lot of wealth, then the strategy would be to hold your wealth for a fixed amount of time so that it may grow into something substantial.
Any diversified portfolio would enjoy both an asset that generates an income and a more fixed, less liquid asset that gains significantly over time.
The Risks of Lending Money on P2P Platforms?
Lending money on a peer-to-peer platform is not like lending money to your brother or best friend. Lending your money with peer-to-peer platforms is like putting your money in a savings account. There is an overarching entity that is securing your funds, and there is collateral in case a loan defaults. And while it may take a little longer to receive and transact with your funds, it grows at a much faster rate.
There is a variance in how much a P2P lending platform is willing to secure investors capital. But, all the platforms exist to generate revenue and interest for the platform and the investor.
It is important to be critical and wary of loans that are unsecured and of platforms that do not offer manual investing. An advertised IRR or yearly return on a website is meaningless if the platform cannot properly service their loans and implement successful fund recoveries.
Verdict
As investors we ought to invest in products, ideas and businesses that we understand and believe in, regardless of the size of the investment or for how long its held.
If real estate is something that you're familiar with, you may want to check out EstateGuru as they are currently servicing the most successful mortgage lending platforms. Decisions in investing are not cut and dry. There are many industries you may choose from and most of them can be invested in through a P2P lending portal. If we had to suggest the safest way to invest, we would go with EstateGuru.