what is P2P lending?

P2P lending is lending between individuals. Hence the name P2P or peer to peer, which means peer to peer or peer to peer between equals. The peculiarity is that there is no financial institution as such, which provides the money institution as such, which provides the money, but it is private individuals who lend the money lend the money. But there is an organisation (platform) that acts as an intermediary between the two parties as an intermediary between the two parties.

There is also the variant in which individuals lend money to companies to companies, in this case it would be P2B (peer to business).

what is crowdlending?

Actually, the concept is very similar to P2P lending. Crowdlending, which stands for crowd=multitude and lending=borrowing, is when several people contribute small amounts of money that, together small amounts of money that, together, will serve to finance a person, company or project, in the form of a person, company or project, in the form of a loan. There are other similar forms of similar forms of financing such as crowdfunding, crowdequity, etc.

On the web I will use crowdlending and P2P lending as synonyms in many cases P2P as synonyms.

what is a P2P platform?

A P2P platform is the intermediary that connects investors (who put their money in) and borrowers (who borrow money). In some cases this same platform is the originator of the loans, in others it will function as a marketplace where multiple marketplace where multiple originators (or issuers) publish their loans to attract investors to attract investors.

what is a loan originator or issuer?

A loan originator is the company that is in charge of offering and managing the loan. They usually handle everything from the origination of the loan to the the granting of the loan, through to the collection of the loan. In some cases, the same loan originator is the P2P platform and takes care of the investors. Other originators only handle the borrowers’ side and publish their loans with a third-party loans with a third party marketplace platform.

what happens if a platform goes bankrupt?

In the event of bankruptcy, you will no longer be able to invest the money and usually an external provider will step in to settle the remaining loans and take over the payments and take over the payments. How this works in each case depends on the depends on the platform, and can usually be found on the platform’s website. If if you can’t find information directly on their website and you want to find out more, I advise you to information, I advise you to ask directly through their contact email contact.

what is the default risk or default rate of each platform?

It is not possible to answer this question in a general way, as each platform has different guarantees and different platforms have different guarantees and, therefore, different default rates default rates. But more and more platforms want to be more transparent with the investor and provide this data with the investor and provide this data. Check whether the platform provides this data in the reports or statistics they publish and write them an email if you cannot find this information on their website email them if you cannot find this information on their website.

how many P2P platforms are there?

There are more than 100 P2P platforms across Europe. Not all of them are worthwhile and many are not even available in English.

what should I consider when choosing a crowdlending platform?

When choosing a P2P platform, there are some general and some personal criteria. You should consider how reliable the platform is and how secure it is. As personal criteria you should consider factors such as: whether it has a portfolio generator or autoinvestment tool, secondary market, minimum amount to invest, repurchase guarantee..

which platforms are best for beginners?

A good platform to start with is Bondora. It is very easy to use and with the Go&Grow option you don’t need to do anything more than deposit the money and activate the option to invest, without having to configure anything else.

The Mintos platform is definitely the biggest and is also very interesting for beginners. Choosing their predefined strategies also does everything for you. And if you prefer a little more control, with the Autoinvest option you can create a portfolio automatically by indicating your preferences.

what is a portfolio manager or autoinvest tool?

It is a tool that allows you to automatically invest your money. It is available on many platforms. Once set up correctly, you will not need to spend more than 5 minutes a month (or even less) managing your portfolio.

what is the buyback guarantee?

It is a guarantee offered by some P2P platforms to investors investors. It consists of the fact that, if the loan defaults, after a certain period of time (30 days, 60 days…), the investor will be able to buy back the loan (30 days, 60 days…) depending on the platform, the originator of the loan or the platform itself will or the platform itself, will buy back your loan. In this way you will not lose your money.

what is cashback?

Cashback is a promotion offered by some platforms, subject to certain conditions (e.g. investing in loans from a certain originator) a certain originator). If you invest according to the criteria of the criteria, you will benefit from a % of the money you have invested.

what is cashdrag?

Cashdrag is money that is sitting idle on a platform, uninvested. This is due to a shortage of loans or projects to invest in on the platform or because the demand is greater than the supply, there are too many investors interested in investing and there are not enough loans to go around.

what is the secondary market?

The secondary market is an option offered by some platforms where you can sell the loans you are investing in to other investors. This is very useful if, for example, you need the money you have invested at some point before the loan agreement ends. You can put your loans up for sale on the secondary market and wait for other investors to buy them. You will then have your money available for withdrawal or reinvestment.

how much money should I invest?

That is up to you. The minimum you can invest on each platform varies, but it is usually very low, from €1 with Bondora, €10 on many that offer consumer loans, such as Mintos, to around €50 or €100 on platforms that offer larger loans, such as real estate crowdlending or crowdfunding for business projects. This minimum amount is also usually the minimum amount to invest per loan within the platform.

how much money should I invest in each platform?

It is important to diversify the portfolio to minimize the risk of the platform. We advise you to establish a budget with the amount you want to invest and divide it among several platforms. The more money you invest, the more different platforms you should use. However, if your budget is low, two or three platforms might be enough for you. I recommend you to start small and try out a few platforms with a small amount of money to get to know them better and assess if you are really interested in investing in that platform.

how much money should I invest in each loan?

This is also where diversification comes into play in order to minimise the risk of default. The money to invest per loan, in order to achieve adequate diversification, depends on the amount you invest. It is generally recommended diversification rate of between 1 and 2.5 %. However, if you invest however, if you invest a lot of money, a higher diversification makes sense. Currently, using self-investment tools, it is very easy to diversify into many different loans loans. Each platform sets a minimum amount to invest per loan, typically ranging from as little as £10 to as much as £50 or £100.

what fees do P2P platforms charge for investing?

Normally, crowdlending platforms do not charge commissions for investing, but not all of them. For example, Bondora Go&Grow charges a small fee of a small commission of 1€ when you withdraw money and Reinvest24 2% of what you invest you invest. Others such as Mintos, Estateguru, Crowdestate… do not charge any commission. I advise you to consult the conditions of each platform before starting to invest to invest.

do you have any other doubts about crowdlending? Write to me: carmen@happyeuros.com

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