P2P Lending | A Guide to Using High Liquid Platforms
Liquidity is one of the top most important aspects of any investment strategy. The phrase, "cash is king" in large part refers to the ability to perform a transaction for just about anything, with cash. Cash can be thought of as the pinnacle of liquidity. Most investors want their investment portfolio to be as liquid as the money in their wallets. There are many peer-to-peer lending platforms that offer such a service.
We're going to review all the top platforms which offer the highest degrees of liquidity, and assort them in ranking order by which platform has the most features for liquidity. High liquidity on investment platforms appears to be a more European phenomena than an American one. The majority of countries based in the EU dedicate more facilities to ensuring that their investment portfolios can be as liquid as cash. Meanwhile, in the US, there appears to be little concern as to whether or not US investors have access to liquidity on P2P lending platforms.
Swaper
In 2018, Swaper was formed by loan originator Wandoo Finance, in Estonia. Swaper, is now owned by Marina Tjulnova. The platform itself is built with the idea of being a simple, easy solution for investors who want to earn more interest on their sitting capital. Investors on Swaper, invest their own money and the platforms algorithms do the rest of the investing for them. It's a completely automated service in the primary market. Initial deposits start at 10 EUR, and yearly returns are roughly 14 percent. If your portfolio exceeds 5000 EUR, then Swaper gives an additional 2 percent in yearly returns.
Swaper's investment services come with multiple levels of liquidity. All loans on Swaper are short term consumer loans that range thirty days, and all loans are unsecured but they do come with buyback guarantees. The buyback guarantees are all issued by Swaper, while all the loans are issued by Wandoo Finance. Swaper also has a very active secondary market which increases Swaper's liquidity even more. The peer-to-peer lending platform also has no fees on their marketplace other than a 2 percent trading fee on Swaper's secondary market.
Due to the high levels of automation on Swaper, all of these liquidity features are essential. The algorithm itself will sort your money into loans based on the specifications that you choose. But, it's completely operated by Swaper. That is why there is so much liquidity. If there are loans you do not believe in, or feel that you can rake more capital from other loan contracts you have the secondary market to ensure that you can cash out.
EstateGuru
EstateGuru is the largest peer-to-peer lending service that sells real estate loans in Europe. EstateGuru offers different real estate projects that have different time spans and varying interest rates. The minimum deposit is 50 EUR and yearly returns range from 8 - 12 percent. EstateGuru is considered one of the top peer-to-peer lending services for many reasons, but the most salient reason, EstateGuru has never lost it's investors' capital, and therefore, have been considered a low risk but high reward platform.
EstateGuru maintains that the reason it is able to conduct their lending/borrowing ecosystem so effectively is due to their team's ability to vet and assess borrowers and investors. All loans on EstateGuru come with either a 1st or 2nd rank mortgage on the property. This is important because when a borrower defaults on their loan there is a bit of collateral to be sold off. So at the very least, the principal of all investors is protected on EstateGuru. EstateGuru comes with an auto-investing function but only for portfolios above 250 EUR. EstateGuru offers both a primary marketplace and a secondary market for investors who are in need of added liquidity. Generally speaking, a lot of the loans on EstateGuru are long term loans and there are no buyback guarantees.
EstateGuru is a giant real estate commissioner in Europe. All loans are based of a direct investment structure rather than an indirect investment structure. The types of loans are the following: retail businesses, restaurants, hotels, homes and development. Investors, are by and large, satisfied with their investment experience with EstateGuru.
Mintos
Mintos is the largest consumer loan based peer-to-peer lending service in Europe. For several reasons, they host the largest number of loan originators, the highest number of active investors and they hold the largest average portfolio size per investor. It can be said without a doubt, that Mintos is a European favorite. To invest on Mintos there is a minimum requirement of 10 EUR and yearly returns can range from 8 - 12 percent depending on risk management and investment strategy.
Mintos is not only one of the largest peer-to-peer lending markets in the world, it is also one of the most diverse. Investors on Mintos can find all sorts of loans from wedding loans to development loans. This is because Mintos aggregates various loan originators on their platform, so they may offer their loans to Mintos' investors. In order to ensure the loan originators are trustworthy, Mintos provides a rank from A to D. The more they issue healthy loans and finalize contracts the better their rating becomes. Mintos uses a number of features to ensure that investing with Mintos is a comfortable experience.
Mintos, has two marketplaces: a primary and secondary. The primary can be accessed manually, or through the auto-investing tool. The secondary market is primarily for liquidity purposes and can not be accessed with an auto-investing tool. There is a one percent fee to use the secondary market but this number has been known to vary between one percent and two percent. Investors from all over the world have access to both markets on Mintos. Every loan originator on Mintos provides a buyback guarantee. In terms of liquidity itself, Mintos provides enough liquidity in their secondary market. The buyback guarantee, as well as their diversified marketplace are also features of Mintos that provide liquidity for the overall ecosystem.
How Important is Liquidity?
Liquidity is essential to a pleasant investing experience. It's important to remember it's your money that you're investing. Being able to profit from your money, as well as being to withdraw it are equally important. In many cases, there will be a better investment available elsewhere, or your investment may reveal itself to be a mistake. The ability to exit out of such a less profitable loan contract will play a big part in determining the success of your portfolio.
Whether it's because of the nature of the loan market or the secondary market, liquidity is essential to making a marketplace operate safely and securely. Secondary markets are great for this reason because they don't pose any risk to the loan portfolio, unlike buyback guarantees. When a secondary market sale happens, it simply means one person is leaving his position and somebody else is taking it. A buyback guarantee is invoked when a borrower defaults on his loan and then the loan originator or provision fund is obligated to pay back missing funds.
Market Type
Consumer Loans
Average Returns
14 - 16%
Minimum Investment
EUR 10
Signup Bonus
None
Registered users
6000
Total funds invested
EUR 400 Million
Default rate
Undisclosed
Regulating entity
Self-Regulated/EU Compliant
Buyback guarantee
Secondary market
Payment methods
Bank Transfer
Withdrawal methods
Bank Transfer
Swaper only offers auto investing in unsecured consumer loans in Poland and Spain. Swaper is a subsidiary of Wandoo Finance Group, a loan originator that also services the loans on Swaper's platform. Swaper advertises a 14% IRR and premium investors who have invested over 5000 EUR receive an IRR of 16%.
Market Type
Mortgage Loans
Average Returns
8 - 13%
Minimum Investment
EUR 50
Signup Bonus
0.5%
Registered users
150,000
Total funds invested
EUR 700 Million
Default rate
6%
Regulating entity
Bank of Lithuania
Buyback guarantee
Secondary market
Payment methods
Bank Transfer, SEPA, Credit Card, TransferWise
Withdrawal methods
Bank Transfer, SEPA, Credit Card, TransferWise
EstateGuru is a highly recognized and successful P2P Lending company. What makes EstateGuru as P2P Lender so profitable and secure? Explore the breakdown with P2PIncome's thorough analysis of EstateGuru's strengths and weaknesses.
Market Type
Consumer Loans
Average Returns
9 - 12%
Minimum Investment
EUR 10
Signup Bonus
1%
Registered users
500,000
Total funds invested
EUR 8.9 Billion
Default rate
16%
Regulating entity
Financial & Capital Market Comission (Latvia)
Buyback guarantee
Secondary market
Payment methods
PayPal, Bank Transfer, Credit Card, TransferWise
Withdrawal methods
Wire transfer, Credit Card
Mintos is P2P loan originator aggregator whom after years of slow growth exploded and became the number one P2P lending platform in Europe. Find out why in this review. Is Mintos an investment worth considering?
Verdict
All the platforms listed above are great platforms in so far as they have very active secondary markets. However, not all peer-to-peer lending platforms were created equally. Some of these platforms are better than others because they have added liquidity programmed into the investing experience they provide. Swaper has invested more resources in ensuring that their investors can cash out at any point if they are in need of their money. Swaper also has zero fees, a buyback guarantee and all loans are only 30 days short. Keeping all of this in mind can only leave us with the conclusion that if you are going for a peer-to-peer lending platform that is worth its salt, and has high levels of liquidity, then Swaper might be the perfect choice for you.