Have you heard of P2P financial tools - but are not really sure what they are, and how it all works? Wouldn’t mind earning some passive income - but the idea of P2P sounds a little too complicated? Well, let us end this myth once and for all: P2P lending and P2P investing aren’t complicated. It can be really simple – with the right platform, of course. Here’s all you need to know about P2P financial platforms before you get started!
Let’s start by defining what P2P finance is. In a nutshell, P2P (or peer-to-peer) finance can be described as connecting borrowers who are looking for loans with lenders who want to invest their money in those loans. This process excludes traditional financial institutions and is often facilitated by P2P lending sites.
For the purpose of this article, let’s clarify the following terms:
- P2P lending (P2PL) refers to the process of financing (i.e. of the received loan application) which allows individuals to lend and borrow money without using a traditional financial institution (i.e., banks).
- P2P investing (P2PI), on the other hand, can be defined as the process of investing your money to those who are requesting a loan.
Because it is a direct exchange between the lender and the borrower, the process doesn't require the involvement of banks and financial institutions. The P2P platform acts as an intermediary. It facilitates the process of lending and ensures controls protecting both parties are in place. They work to make the experience of lending and borrowing as smooth as possible, as well as determine their clients’ credit rating.
P2P finance is a form of alternative finance – which we’ll explain next.
In the past, businesses and individuals who needed loans or wanted to invest their money had to deal with banks and other traditional financial institutions to carry out these financial tasks. The process was slow, tedious, and somewhat draining.
But that’s no longer the case – or, at least, users now have a choice. The financial services industry is transforming rapidly – and there are superior financing options available for those who want to make their money go further, without the complexities that a traditional financial institution would involve.
How can alternative finance platforms be defined? We think this definition from Investopedia captures it most accurately: "a more efficient intermediary in the supply and demand of capital, leveraging technology to operate online."
Alternative finance includes the likes of crowdfunding, alternative lending, and other financing models. It uses major tech and electronic communication advances to create a more efficient and accessible way of investing for businesses, individual lenders and borrowers – particularly those who may not have substantial sums to start with (FAST INVEST is an excellent example of that).
The process of P2P investing is relatively simple. Once you’ve found a P2P lending platform you want to invest with, you sign up to become a loan lender - and decide how much money you wish to lend and for how long. You then add funds to your account and start investing in P2P loans. Many P2P companies tie up your funds for an agreed term. Make sure you are comfortable with not seeing your money for a couple of years before committing to such timescales.
With alternative financing companies like FAST INVEST, you have exit options that allow you to stop investing any time. So, if your circumstances change, you have options to sell your investment.
Now, you’re probably thinking, “How do P2P companies make sure that I lend my money to people who will payback?”
With P2P platforms, the borrowers will apply for a loan and go through a verification process. Once their loan request is approved, they will receive a loan for the agreed period of time – and will be required to make regular repayments of the borrowed amount, as well as interest, each month.
When it comes to alternative financing, the loan verification process is first completed by licensed lending partners who supply loans to the alternative financing platforms.
That’s followed by another thorough check performed by the platform itself, to ensure the risk is fully evaluated – and the borrower will keep up with their payments.
Now that you know about P2P lending and investing, as well as the broader concept of alternative investing, you may wonder how to find the best company to invest with.
You’ll probably agree that finding a reputable and trustworthy investment platform is on top of the priority list. While there are plenty of online investment sites out there, do your research before you commit to any of them.
The ideal company to invest money with should:
- Offer a high return on investment (ROI), obviously! You’re investing in P2P loans to make money after all. ROI varies with different companies, but look for something not lower than 10-12%
- Make the process smooth, easy and quick with a user-friendly platform and an efficient financing system
- Offer protection from late borrower repayments with a BuyBack guarantee that if the borrower is late to make a payment, it’ll be covered by the company
Now, funnily enough – FAST INVEST ticks many of these boxes!
Here are the benefits of FAST INVEST to get excited about:
High ROI. We understand that only a high-interest rate could attract investors to join our platform, and this is a default feature of FAST INVEST. It supposed to be like this, isn't it? Check our loans with up to 18% interest rate in our Loan List or look up for discounted loans in our Secondary Market.
AUTO INVEST. This tool makes you smile. AUTO INVEST uses algorithms to recognize new potential investments based upon the user's pre-selected criteria. This means that your money is never idle, for example, when your monthly return gets paid, it can be automatically reinvested in a new opportunity, and thus your income continues to grow, while you continue to go about your regular business. It's one of the quickest ways to generate a passive income.
EXIT OPTIONS. Sometimes unexpected happens and you need your money urgently. We offer smart ways to exit your investments.
- SECONDARY MARKET. If you are looking to sell your loan on the FAST INVEST platform and do not want to wait for the loan to run out, your first option is to make use of the Secondary Market. FAST INVEST integrates Secondary Market into our Primary Market, aka Loans List. Loans listed on the Secondary Market named Backup Loans, and you can find it highlighted in a pale blue and marked by the blueish symbol.
- BUYBACK GUARANTEE. Whenever a payment is more than three days overdue, our BuyBack Guarantee is triggered. The repayment (principal + interest) is paid within three days if the loan is of a 3-day BuyBack guarantee. With a 7 and 15 days BuyBack guarantee, if the repayment is not made with the period, then the loan will be repurchased, and you will receive the whole outstanding principal and also accrued interest.
SECURE INVESTMENTS. We want to assure you that FAST INVEST has a well-balanced business structure. The majority of loans listed in our loan list are installments. Installment is the type of credit issued at a defined amount for a set period:
- Payments are usually made monthly in equal installments, which generally lowers the risk of default compared to Payday lending.
This is a reason why our loans are - low-risk types. Most of the lenders that we partner with have established full processes of credibility assessment.
ADJUSTABLE PREMIUMS. If money does not make money at some point, there will be no money left to spend! Do you have an extra €1k, €10k, or €50k to invest? And You think something is missing here! Let's chat about how we can help to make a profit for you with your spare money. Adjustable interest rates and cashback percentages in our toolkit could infuse you with fresh and joyful scents.
FINANCIAL CONCIERGE. Humans are social creatures. We crave interaction and attention. We like to be treated as individuals and not as "a number." We all know, investors desire not only high ROI, but they are looking for something more - a unique experience. Investors aspiration - to be treated as individuals; they want services that are tailored to their specific needs, for example, offering tailoring terms, rates, pricing to meet their needs. FAST INVEST brings you an option to make it happen.
We are not a regular alternative investment platform. As you noticed, we see the future in bright colors and a responsible manner. FAST INVEST intention to collaborate and find the best solutions for both parties. Both sides must respect each other and profit from this respect. It's business, it's finance, and finally, it's the art of investment.