Investing in consumer loans has increased over the past few years. More and more people choose to invest their money in the P2P lending marketplace. As you will, probably, work with the same platform from 3 to 5 years, choose it wisely.
Check out the company
Before start using P2P lending platform investigate it carefully. Check out information about the company, its’ mission, and strategy, locations. Review what people work behind. Visit social media like Facebook or LinkedIn accounts, look what is happening there. There are some cases that people invest their money in the platform that does not exist in the real world. Double check before transferring your money.
Check out BuyBack Guarantee
There are moments when you need to get your invested money back as soon as possible. It is common practice in the P2P market to give a satisfied interest rate for investors but there is one condition - you can not get your money back very soon. If you need your money back and you have invested money in loans which do not have buyback guarantee, you have to sell your loan in the secondary market. It takes a lot of time and energy to get rid of the loan you do not need anymore. We have no secondary market, therefore you always get back your money anytime you will need it.
The other very important issues to study before choosing investment platform is the company policy according to bad debts. What happens when borrower will not make future payment. Definitely, you can protect yourself by diversifying risk. You can also choose investment platform witch minimizing your risk in these cases. For example, if these case appear while investing in our platform, we will compensate the investor both the invested principal amount and accrued interest for the invested period.
The fourth common mistake investor takes while choosing consumer loans investment platform is that they do not check the reviews. Reviews will show you if customers are satisfied or not about the P2P lending marketplaces. Is the platform user-friendly, company stable, investments have high-interest rate and so on. People also share their testimonials and opinion if something goes wrong.
And finally, one of the most important point - interest rate. Investing in consumer loans might be really profitable. Just picking investment platform to keep in mind that very high-interest rate may indicate high risk as well. You need to find that perfect combination. We have minimised risk as much as it is possible and you still can get up to 13% interest rate.