In an effort to diversify my income, I recently came across Peer-to-Peer (P2P) lending.
Peer-to-peer lending has emerged as a revolutionary investment avenue in recent years.
This innovative financial model allows individuals to lend money directly to other individuals or small businesses through online platforms, bypassing traditional financial intermediaries like banks.
The good part is that you as an investor (lender) do not have any contractual obligations to the borrower. You will not even know who the borrower is.
Everything is handled by the platform. All you have to do is put in your money, select investment tenure (3 months, 6 months, 1 year, etc.) and invest.
The platform’s algorithm will do all the heavy lifting from looking for borrows to paying you back your earnings.
If the borrow defaults, you are not going to lose out as your investment in many cases is insured by the P2P Platform.
Investment returns vary from one platform to the other, but they are generally better than traditional savings accounts.
For example, if you are in Zambia, the two financial services offering P2P are PremierCredit and Lupiya.
With PremierCredit, you get a 3% return on your investment every month.
If you invest $1000, you will be getting $30 dollars every month plus your principal at the end of the investment tenure.
If you are in the U.S. you can use LendingClub, Prosper, and many other P2P platforms. In India, you can use LenDenClub, 12% Club, and many others.
If you search Peer-to-Peer Lending in your country, you are likely to find one. They all nearly work the same way.
So, rather than just keeping your money dormant, or earning small returns on a traditional savings account, you can use P2P investment for better returns.
Further, P2P lending is a relatively passive investment. Once the funds are invested, lenders do not need to actively manage the loans.
The platform handles the administration, including loan repayment collection and distribution to investors.
This passive nature makes P2P lending an excellent choice for individuals who seek to diversify their investment portfolio without the need for extensive time and effort.
NOTE: Although P2P lending is a low-risk investment vehicle, it is worth doing more research before you can invest. There are still risks involved in nearly any type of investment
If you want to learn more about this, you can reply to this email or comment in the comment section.
If you are interested in tracking your finances with a Google Sheets template, you can check out this Financial Tracker that I made.
Thank you
May the odds ever be in your favor