8 Reasons to Invest Money in Peer to Peer Lending Marketplace

8 Reasons to Invest Money in Peer to Peer Lending Marketplace

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Here are some reasons, which make peer to peer lending a perfect marketplace for the investment of money:

1. Higher Returns
Over an annualized period by regularly reinvesting the monthly returns, investors can expect returns as high as 30% annually, if done carefully.  This is not a volatile investment vehicle unlike the stock markets and offer control over the portfolio unlike the mutual funds.  The key is to diversify the investment across borrowers in a large portfolio.

2. Recession proof
During the financial meltdown of 2008, peer to peer lending emerged as one of the most profitable investment class. While most of the companies and all investment collapsed, those who invested wisely made comfortable returns with the concept of P2P Lending. 

3. Investing in real people
With this lending process, the option to connect with the real people comes directly. You can read their stories and can make a decision based on your interest. You can easily know all about their background and their side of the stories, with the freedom as offered in the peer to peer lending. You can clearly evaluate the risks associated with any person you are investing in.

4. Making loans more accessible and affordable for the bottom of the pyramid
With the p2p lending, in fact, you are enabling individuals and business not in the ambit of traditional financial system to access credit. Those who are rejected by the banks can be given a chance to borrow money through the peer to peer lending and thus a major contribution towards the development of society can be achieved with this concept of lending.

5. Option to diversify your portfolio
With the better diversification scheme as offered in this lending scheme, the options to make losses is largely minimized. The diversification of funds in across all risk classes ensures chances of better profits are in the lending process.

6. P2P lending is a transparent approach
With the p2p lending, you exactly know where your money is going. With all other investment, you really are unaware of the fact, where the money is distributed; but with this concept, you are fully aware, where your money is invested.

7. Level of risk within your hands
This scheme of lending offers you with the various levels of risks you can take. The more daring, you show towards your investment, the better returns are expected.  Thus, your returns entirely depend on the level of risks, you are ready to take while going through the investment process.

8. Volatility of earnings in stock market and constant monitoring
Stock markets have historically shown very volatile behaviour in the short term and when it comes to technology stocks, then net-worth can be nullified within months.  This increases uncertainty about the value and quality of one’s earnings.

Thus, it’s better to opt for the peer to peer lending in combination with other asset classes in your investment portfolio.

The peer to peer lending offers a genuine chance to generate huge returns on your investment and any investment done wisely in this concept can return to high profits.                                      

 

- By Team IndiaMoneyMart
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