P2P Lending - How to Earn up to 12% Annual Return‎

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P2P Lending - How to Earn up to 12% Annual Return‎

The financial crisis has had at least one interesting side effect: the rise of alternative and increasingly creative forms of investments. Peer to peer lending, also known as peer to peer loans or P2P for short. It is a new method of credit transaction in which the lenders (creditors) directly lend money to the borrowers (debtors) without the intervention of banks or other traditional financial institutions.

The interest rates in P2P have been one of its main advantages applicable to both lender and borrower. The lender gets a higher return on investment. With rates of interest between 6% and 12%. When choosing a P2P platform to invest into, the following features has become a significant vote in favor of those sites.

Not making it too analytic, I will pick a few important points, which may act as a key factor in deciding upon the platform of your choice.

Buyback guarantee

Most p2p lending platforms and marketplaces provide unsecured personal or business loans, meaning there is no collateral to back the loan. The platforms use an extensive analysis of each person and business that applies for a loan taking into account many factors the likes of monthly income, are they homeowners or not, debt history, credit card payment history,….etc.

By analyzing these factors they create a risk profile and based on that they decide if the applicant gets a loan and for which interest rate.

High-risk loans offer investors high-interest rates but at the same time, they have a high chance of defaulting (meaning the borrower doesn’t pay back the loan). As there is no collateral this can mean that an investor loses his invested/lent money. By diversifying your loans over many different loans with varying risks you can lower your risk…and this is what most investors do.

When Mintos entered the market they decided to offer secured loans. Up to that moment, this had not been done on a large scale yet in the p2p lending market. And Mintos, therefore, created a great new addition to these loans.

100% Buyback guarantee secured loans will net you, as an investor, less interest than unsecured loans, but it will greatly reduce your risk as Mintos will buy back the loan whenever the borrower defaults on his payment obligations for 60 days or more. In such a situation the loan is automatically bought back by the loan originator from the investor at the nominal value of the outstanding principal, plus accrued interest income.

This is a great system that greatly reduces your risk as a lender.

AutoInvest Feature

Auto Invest enables users to make customized Filter and invests their funds in loans based on their standards automatically. Auto Invest feature saves time and effort. Before this feature is introduced, lenders were required to invest manually and often assess the status for new investments. The tool simply invests available funds on the loans, reinvesting whenever possible. The Auto Invest feature could be stopped and re-triggered at any time.

Minimum investment amount

The low minimum investment makes diversification easy. The P2P lending character implies that you must construct a portfolio of hundreds of loans at which each loan is a small percent of the total portfolio.

Getting diversified across several loans is among the secrets to having a successful experience when investing in p2p lending. Like other investments, diversification will lower the possibilities of your investment returns volatility.

Secured Short-Term Loans

Short-term loans investments are more liquid or reachable in the event you want your cash. As soon as you've invested in loans you'll begin receiving payments on your account within 30-45 days. The moment your balance goes over minimal investment amount you may invest your money in new loans with auto invest feature. With p2p lending you're getting interest and principal payments for each loan every month.

By definition, Compound interest is interest added to the principal of a deposit or loan thus the extra interest brings more interest. This increase of interest is known as compounding. In comparison to simple Interest at which just the original capital earn interest, the compound interest gives more advantage for Lenders.

Liquid Secondary Market

One of the problems if you decide to invest in long-term loans on peer-to-peer lending sites is that it's hard to turn around and sell them if you need the cash you've invested.

The Secondary market is where investors can place their investments for sale to other registered investors. Secondary market allows lenders to cash out loans early. To do this a lender simply sell his loans at Premium or discount. Investors can exit their investments by selling the remaining loan to another investor.

Currency Risk

Some platforms like Twino and Mintos offer loans conducted in different currencies to protect investors from currency risk. This functionality allows investors to choose the currency that they want to invest in. and every transaction id processed in the chosen currency (including deposits, withdrawals, investments, repayments, etc.).


Fees reduce the value of your investment. Over time, even ongoing fees that are small can have a big impact on your investment. When researching p2p lending sites be sure they didn’t charge any fee.

Which companies offer almost all those features?

I can continue writing on these and many more factors, but not much will come out of it, rather, I recommend the readers who are interested should try these platforms before sticking with the first that came in sight. Selecting old and matured platforms only has one apparent advantage, a big user base to get started right away after registration.

Here are the best places to invest:


The organization, formerly known as Finabay, has originated over EUR 350 million in unsecured consumer loans and started operations in Latvia in the year 2009. Finabay launched Twino in 2015 an investment market providing investors from throughout Europe a chance to generate premium returns by investing in consumer loans originated by its own daughter companies in Denmark, Georgia, Poland, and Russia.


At Mintos www.mintos.com, Latvia both institutional and retail investors can invest in fractions of loans. Currently, they serve small-company loans, private loans that are unsecured, secured auto loans, and home mortgages. The minimum investment in one loan is EUR 10.

They have plenty of loans to invest, and they also make it possible for just about any individual to select exactly what it desires. Since it brings together investors and loan originators like Capitalia, Mogo and Debifo among others. Mintos harbors some substantial distinctions to other peer to peer platforms!


DoFinance www.dofinance.eu is a P2P system for private people to invest in customer loans. DoFinance is a part of the Alfa Finance Group – an on-line lending and investment organization working in Asia, Transcaucasia and Europe.

Since its start in 2015, the Alfa Finance team has attracted over 150,000 customers that were registered and over € 16-million in loans issued as funding loans. Loans available for investment on DoFinance are derived from the Alfa Finance Group. While its headquarters are located in Latvia, the Alfa Finance Group also has offices in Georgia, Poland, and Indonesia.

European platforms with Buyback Guarantee

These p2p lending platforms operate in Europe and accept investments in Euros. All sites below offer buyback guarantee and English as a language option on their website, along with several other language options.

The Anti-Money Laundering Law requires that platforms verify the identity of investors. On the sites listed below, you are qualified to invest if:

- You are over 18 years of age

- You have a bank account in the European Union

- Pass the identity verification through an identification document

Platform Returns Secondary Market
Viainvest 12% No
Twino 10% Yes
Mintos 9-13% Yes
Viventor 8-11% Yes
DoFinance 6-12% No
Iuovo Group 5-12% Yes
Robocash 14% No
Grupeer 13-14% No
Lenndy 12-13% Yes
Swaper 12-14% No

No investment is without risk, spread your investment across many borrowers, platforms, and loans.

Find out more videos and resources by joining the group: Best P2P Lending Sites


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Guest Saturday, 17 November 2018