So in fact investment doesn’t differ from usual bank deposit, the percentage rate is just higher by times and that’s all?
Just a quick intro to P2P lending:
The outrageous irresponsible behavior of banks, and the following shortage of credit scattered the banks monopoly on loans. This made a gap in the credit market, allowing new contenders for the first time in hundreds of years. Among the disrupters we find the p2p lending platforms. Peer-to-peer lending is a method of financing that allows people to borrow and lend money without a financial institution. Harnessing technology and big data, P2P platforms connect borrowers to investors faster and cheaper than any bank.
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Verification time:
Verification time for you as an investor is about two days. We naturally are required to do regular KYC, like any other actor in the market.
The key here is that you don't need to do it more than once. Most of the investors in p2p lending market, are diversifying their money across different platforms.
They do that to minimize risk, but also because the p2p lending platforms often specialize in a certain type of asset. Some only have personal loans, others only mortgage etc.
Problem here is that the management of perhaps 7+ platforms, get increasingly time consuming, and you risk losing the overview of what is going on with your investments.
Also just signing up for 7+ platforms, who has their own independent KYC, own interface and own systems - is just a real hassle.
Many normal/retail investors end up just investing in a single platform, to avoid all this. But that is a risky proposition(All eggs in one basket). But you also often will not
get the best "bang for your buck", in terms of interest rates.
