Peer to peer lending, also known as P2P lending, has been considered a niche investing tactic used by few investors – until now. Peer to peer investment opportunities are being taken advantage of by more and more investors each quarter. That is because so many investors are finally getting wise to the many advantages these types of income investments offer. If you have yet to learn the benefits of investing in peer to peer lending, keep reading. This post presents the top five advantages peer to peer lending investments offer traditional investors like you.
Peer to peer lending allows you to better diversify your portfolio. This is particularly beneficial to those investors who have a low-risk portfolio that provides them little return on investment. Peer to peer lending investments are a bit riskier than bonds or similar assets. However, they also have a much higher return rate too. That makes them the perfect option to diversify your portfolio to increase investment income returns. If you need to diversify and do not mind taking on a bit more risk, peer to peer lending offers that advantage.
The single most advantageous aspect of becoming a peer to peer lender is the authority and control it affords you, the investor. You are the one who calls the shots. You determine how much money you want to lend and to whom. That means that you can self-manage your risk based on the loan seeker profiles you choose to extend credit to. This is a huge benefit that would not be possible with traditional holdings like mutual funds and similar. Obviously, this is one of the main reasons why so many investors are flocking to these so-called niche investments.
Investing in peer to peer lending provides bigger returns to you, the investor. Obviously, the whole point of investing is to make money. That is much easier when you become a peer to peer lender on one of the many online peer to peer lending platforms. You can benefit from 500% bigger returns than you would expect from the average deposit rate. Clearly, this is a considerable amount. For those that want to make more money from their investments, which should be every investor, choosing to become a peer to peer lender will give you the edge you need to do that.
Buffer Against Market Volatility
Peer to peer lending investments act as a buffer against stock market volatility for investors. This is because peer to peer lender investments have a very low correlation with stock market performance. That means that the stock market fluctuations that impact nearly all of your other assets, including your pink sheet stocks, have little to no bearing on the performance of your P2P lending investments. Ultimately, this makes P2P investments a great way to hedge your bets and insulate yourself from market downturns and potential market crashes. It is one of the biggest P2P lending advantages that investors like you experience once they become a P2P lender.
You Can Change Your Mind
If you should choose, you can also change your mind about your P2P investments. Even if the loan term length is not complete, you can still sell a loan position on some of the top P2P lending platforms. These peer to peer lending platforms allow you to cash out the money you invested whenever you need, similar to day trading software. This is a huge benefit that not many P2P lenders even realize is a possibility. That makes offering loans to peer much less risky for some investors with limited capital to invest. Overall, this makes peer to peer lending investing a relatively low-risk income investment that could benefit all investment portfolios.
P2P lending is no longer just one of many under-appreciated niche investments taken advantage of by those elite investors that know all of the investment definitions in the book. Becoming a peer to peer lender is a great way to diversify your investment portfolio. It is also an excellent income investment that allows you to make money without moving a muscle. There are a ton of advantages of P2P lending that all investors should familiarize themselves with to make the smartest investment decisions possible for their personal financial success. Consider the benefits of P2P lending, detailed above. These can come to benefit you should you to choose to start investing in peer to peer lending platforms for investment success.