Invest in P2P Loans with 19% Return

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invest in p2p loans

Actually, p2p investing is simply lending money to other individuals.

People like you and me .

They prefer not to borrow through a bank, but through a kind of crowdfunding.

There are handy platforms among them that simply bring together the supply and demand of people who want to borrow and people who want to invest to the other.

It delivers a very attractive return, and the risks are limited by various guarantees from the platforms that protect the investors.

In this article:

Why invest P2P?

This form of investing is not actually investing. Stock prices or the like have no influence here. What you actually do is lend your money, in other words you leave a loan to someone else and get it back in installments + interest. And because the loan interest is many times higher than the savings interest, this means that it is a good alternative to earn money with your assets with a much higher return .

Ultimately, the most important thing is the net result. Loan interest rates are much higher abroad than in the Netherlands, so you can issue the best loans there up to a 19% return on an annual basis. The best paying platform to do this is Mintos . This European platform is the only one with the low threshold of USD 10 to invest, and also has a buyback guarantee for the loans you issue, should a private individual suddenly be unable to pay them off.

Do you prefer a Dutch platform with an entity in your own country that falls under our own legislation? Then you can go to Lender & Spender , but know that you will make less return of 4% on average (partly due to 1% service costs). We recommend that you split your money between both parties and see which one you like best.

Especially interesting because it is possible from a small deposit, so you can easily do this with a little money that you can spare. At Mintos you can invest from 10 US dollars, so with an investment of 100 US dollars you can spread this over 10 loans! So that is a very smart investment. At Lender & Spender you can participate from 100 US dollar, and they automatically spread the investment for you.

What is P2P borrowing?

P2P stands for peer-to-peer. In other words, private persons to private persons. You lend your money to people who need a loan. Everything official in between is arranged by a platform where your supply and demand from other people come together.

You invest in small loans with a short term of a few months, or personal loans of 10-12 months. Just like with a bank, the borrowers have to pay this monthly + interest. And that interest is your profit.

How does peer-to-peer credit work?

The advantage of the intervening platforms is that there is a lot of demand over which you can divide your investment. For example, at Mintos you can already deposit 10 US dollars per loan requested.

In addition, the platforms also offer a tool that allows you to automatically reinvest your money as soon as you receive a monthly payment. This way your capital will continue to grow automatically without you having to worry about it.

All you have to do to get started is sign up. This is free and without obligation, so feel free to look around . You can then choose who you want to lend your money to, and as soon as people start paying off to you, you can return it to your bank account or invest again in a new loan.

Security and reliability

Obviously, the platforms benefit from the people who apply for the loans actually repay them. The platform also earns from that! That is why the platform always checks in advance whether the people who want to borrow money are creditworthy.

This also ensures that you as an investor are on the same side with the platform, and that provides assurance that you will not lose your money to a defaulter. That is why the platforms also dare to issue refund guarantees! At least, Mintos does that with guaranteed buyback : if a private person does not pay back for 3 days, the platform will pay you the borrowed money.

Pros and cons

High return on your money

Little to worry about your investment with autoinvest

Plenty of opportunity to spread your investment

It is not an investment, so it is not dependent on stock prices or the like

You invest abroad (Fast Invest) with a company that does not fall under Dutch law

Or with a Dutch party under AFM supervision, but at a lower return (Lender & Spender)

You can participate at Lender & Spender from $ 100, -.

Lender & Spender has no refund guarantee. So there is a risk that people will not pay back and then you will lose money. However, because there is an automatic spread, this is estimated at a cost of 0.5% return. That is manageable.

P2P investment tips

With any form of investment, it is important to only do this with money that you can spare . In the unlikely event that things go wrong, you still have to be able to pay your monthly charges. You don't want to suddenly have to sell your house because 1 investment goes wrong!

In any case, spreads the risks by investing money with both platforms. At Lender & Spender , your investment is automatically spread over a large number of credits, do that yourself as much as possible at Mintos . So do not put all your money in one or a limited number of loan applications.