Smart
investors, in order to be at a pro end and also to enhance their portfolio,
should consider entering the p2p lending realm because peer to peer loan is
considered to be the perfect alternate investment instrument for income-seeking
investors.
P2p platforms enable one to offer lowinterest personal loans to the borrowers for multiple purposes. There is an elimination of intermediaries like NBFC's, banks and unorganized lenders.
P2p platforms enable one to offer lowinterest personal loans to the borrowers for multiple purposes. There is an elimination of intermediaries like NBFC's, banks and unorganized lenders.
The p2p
platforms have technology driven, state of the art credit evaluation mechanisms
which can assign pre-ascertained interest rates to the borrowers where they are
evaluated across many parameters.
The loans requested can be categorized into various categories like low, medium and high risk where the lender can fulfil the borrower's requirements at those interest rates. The smart way to mitigate the risk for an investor is to build a diversified portfolio where one can invest small amounts into a large number of borrowers, across all the risk buckets.
The loans requested can be categorized into various categories like low, medium and high risk where the lender can fulfil the borrower's requirements at those interest rates. The smart way to mitigate the risk for an investor is to build a diversified portfolio where one can invest small amounts into a large number of borrowers, across all the risk buckets.
Investors
can also use all the information available to analyze the risk to reward ratio
of their investments. The platforms also provide a what-if portfolio analysis
so that the lenders can simulate the performance of various loans in the loan
portfolio to keep a check on the returns.
On the p2p
platform, on a month to month basis, the investors can receive a part of their
principal amount which is along with the monthly interest, which can further be
reinvested to augment of their earnings. The reinvestment of returns will allow
to counter inflation due to the principal of interest compounding.
The lenders,
on an average, can earn gross returns of 18 to 24 per cent by building a
diversified borrower portfolio. Investors who want to diversify their
investments get better returns by the end of the day.
To cut the long story short, the smart investors, in order to enhance their income portfolio, can enter the realm of p2p lending, seek relevant information and then build diversified portfolios accordingly.
The main idea to become successful by investing in p2p lending is to have a clever risk-reward strategy by starting small. So it is a wise decision for an investor to opt for this new lucrative investment option of peer to peer lending.
To cut the long story short, the smart investors, in order to enhance their income portfolio, can enter the realm of p2p lending, seek relevant information and then build diversified portfolios accordingly.
The main idea to become successful by investing in p2p lending is to have a clever risk-reward strategy by starting small. So it is a wise decision for an investor to opt for this new lucrative investment option of peer to peer lending.
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