With ever-increasing prices and inflation, investment has become an unavoidable act wherein you commit your money to an asset with the hope that you can earn additional income or make a profit. Over the years, many investment options became available to investors. Making an investment decision can be an intimidating experience, to say the least. To be a prudent investor, it is important that you understand the investment landscape of our country:
Typically, any investment should begin with defining your financial goals, time horizon and risk preference. Once you have clarity about these aspects, then you choose the investment vehicle that suits your needs. While deposits are believed to be safer than equities, mutual funds endeavor to find a balance between the two. Real Estate and Gold prices, on the other hand, are strongly influenced by policy decisions made by the government. In a nutshell, six of the seven options listed above are affected by factors which are beyond your control (market sentiment, government laws, etc.)
What is Peer to Peer Lending?
P2P lending platforms allow investors to lend money to borrowers at a mutually agreed rate of interest. Borrowers are assigned a risk class which is used by the investors to assess the risk and invest accordingly. Imagine that you have a corpus and decide to invest it using P2P lending platforms. Depending on your risk preference, you choose from the list of borrowers looking for a loan. Once the rates are agreed upon and the loan is disbursed, you start receiving EMIs for the tenure of the loan.
P2P lending offers you a platform where you can spread your funds across various risks within the same portal without having to toggle between equity and debt. This can be done by creating a lending portfolio across various risk classes.
Also, in every risk class, you can further diversify by lending funds to multiple borrowers, reducing your capital exposure/ borrower to a minimal amount. This hedges you to a great extent against loss of capital due to default.
P2P Lending – for all kinds of investors
Regardless of your financial goals and/or risk preference, P2P lending offers an opportunity to all kinds of investors.
For investors with a high risk preference, it offers an opportunity to earn up to 30% on their investment. Also, it allows you to spread your investment across different borrowers with high risk class to hedge against the risk of default.
For investors with a low risk preference, it offers an opportunity to earn at least 11% on their investment. You can also spread your investment across different borrowers with a low risk class to hedge against the lesser risk of default too.
Hence, P2P lending offers an opportunity to almost all kinds of investors to earn returns in sync with their financial goals. P2P Lending is certainly a good investment option for you. People Lend, a Peer to peer lending platform, ensures that prospective borrowers and investors are screened diligently before allowing them access to the portal. The credit profile of each borrower is created by taking into consideration the CIBIL score, location of residence, trends in expenditure, qualification, credit card history and many more factors. Register as an Investor and start earning great returns on your investment.