2024 P2P CROWDFUNDING PLATFORMS, the TRUTH about the BEST ones
How does P2P lending work exactly?
I’m sure you have a pretty good idea of how P2P lending works. But let me just quickly clarify the P2P concept for anyone who isn’t sure.
Here are three things you need to know:
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P2P connects borrowers and investors
The main principle is simple: the platform connects borrowers to investors. Depending on the platform, there are usually two types of borrowers:
1.Companies that are looking to finance their next business venture .
2.Lenders who are showcasing loans that have been submitted to them by people who are in need of money.
Using P2P platforms, you can either get funded by borrowing from the lenders or make money by lending out to those looking to get funded.
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You can choose what to invest in
When a project is showcased on the platform, investors can invest a certain amount of money into financing that opportunity and then receive a generous interest rate back.
The power of P2P lending lies in the fact that loans will get financed thanks to thousands of small contributions by various people.
Investors can allocate very small sums to many different investment options, diversifying their portfolios easily.
You can choose between a wide range of projects to invest in. Anything from personal loans to charity projects.
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The earning potential from P2P is high
The earning potential is not too shabby either. You see target returns up to 15-18%, but consider 10-12% as a final real interest.
It does really depends on what you invest in. Typically, higher-risk investments can yield higher interest rates.
It’s highly recommended to do a bit of research on the actual project before putting in your money.
The returns and interest rates vary highly in P2P investing. On average, you might be looking at a 10-12% return on your investment per year.
At the end of this article, you’ll find as a gift some of the main conclusions that will make your investments as safe and beneficial as possible.
I’ll provide a brief summary of how you could design your first investments in P2P Crowdlending, although with over 400 companies in more than 20 countries, any list needs to be tailored specifically for each user.
Therefore, at Carlia Consulting, we have been helping our clients define and manage their investment portfolios for years, often following our own portfolio as the safest way to invest since we put our own money at stake, making copying our investments a secure and quick way to succeed.
For the specific design of each portfolio, we invite you to contact us at carliaconsulting@hotmail.com.
Which P2P Crowdfunding platform should you choose?
So which is the best peer to peer crowdfunding lending platform?
So which is the best peer to peer crowdfunding lending platform?
There are many more great platforms that could easily deserve a spot in the best p2p lending site list, but the selection I chose has definitely left the biggest impression on thousands of investors all over the world.
There’s no single platform that can work for each and every investor out there.
If you’re a beginner, I would personally recommend to go with Mintos as that’s one of the biggest P2P lending sites with the best reputation.
In the end, it comes down to your personal preference and investment goals.
How to find the best P2P investments
In order to nail P2P lending, you need to find the best P2P lending site that aligns with your investment goals.
Are you more into real-estate developments?
Or would you like to dip your hand into the short-term personal loan niche? Agriculture loans, start-ups, green-loans may be?
That’s the first thing you need to figure out since most peer to peer lending sites are focused on one or the other.
No matter what platform you choose, you’ll probably feel a bit overwhelmed by all the investment opportunities at first. That’s why you have to keep a very clear head on every decision.
All platforms do their due diligence but that doesn’t mean you should let your guard down and invest in every possible loan.
3 golden rules of P2P Crowdfunding investing
- Don’t put all of your funds into one platform
Most people who are dealing with P2P investing put their money in several different platforms and often, those platforms offer quite opposing opportunities. E.g. one is focusing on business projects and the other is focusing on personal loans.
- Don’t put all of your funds into one investment opportunity
Wise investors usually allocate only small amounts into one opportunity, even if they have thousands to spare and could finance one loan all by themselves. If you’re new to a platform, it’s even more crucial to invest only 10 or 20 euros at once (if possible).
- Take things slowly and get used to the platform
When you’re still getting used to the interface and all the options, you’ll most likely miss many functions or options. Try the platform, allocate a very small amount and see how things go. Learn how the reporting works and get more into the whole peer to peer investing world.
Never ever put all of your eggs into one basket – that’s the key principle you need to keep in mind. You’ll thank yourself later!
Frequently asked about P2P Crowdfunding lending
Is P2P lending safe?
With any investment opportunity comes some kind of risk.
In my opinion, P2P lending is a safe risk to take – as long as you have the financial security that you’re not relying on the money you put in to cover any of your urgent needs.
There are things you can do to increase the safety of P2P lending, such as sticking to loans that offer a personal guarantee. However, there is always some kind of gamble when you put your money anywhere other than a simple savings account.
Who can use P2P lending sites?
As long as you’re over 18 and hold a current account, you should be able to invest in a P2P lending site. You may also be asked to verify your identity.
Certain countries, such as those in the EEA (European Economic Area) will have more options when it comes to finding a P2P site they can invest in. However, the US and several other countries can also invest easily with global P2P sites.
It’s worth saying again here that just because you can invest, doesn’t mean you necessarily should. Think carefully about where you’re financially secure enough before parting with any large amounts of money.
Who regulates P2P lending?
The Financial Conduct Authority (FCA) has been regulating P2P lending sites since 2014.
It’s their job to protect consumers and financial markets, and in 2019 they announced new rules regarding marketing restrictions and appropriateness assessments to assist with this.
Conclusions
In social media, there are hundreds of articles or videos discussing the best platforms to invest in during 2024, but as soon as I read, for example, about Lendermarket being one of the best, I know it’s a copy and paste from 2022 listings and not real. Or, for example, they talk about Bondster as another great platform, or some Real Estate investment platforms where 90% of the investments are delayed.
There are many gurus on social media who either speak because they are funded by these platforms or receive special treatment (such as receiving the repurchase of their loans when most investors have their money idle for months), or because they live off recommending platforms that give rewards through their affiliate programs if you recommend new investors. This last one seems very serious to me, playing with people’s money just to earn a few euros regardless of the advice given.
In investments, it is always advised to educate oneself, but I would never recommend anyone to invest in a platform where I myself am not risking my own money, and most of the time, in much larger amounts than my clients, so I am the main interested party in ensuring that the investment is appropriate.
For example, in Lendermarket, I have over 70.000 euros blocked for almost two years. A platform that was very good for years but suddenly started changing the rules of the game and went from guaranteeing loan buyback in 60 days to 240 days, and then after 240 days, they still don’t pay or gradually return 0.5% every 15 days.
Or, for example, Bondster, which to its investors on a platform in South Africa or Mexico, although its parent company is in Russia, with the excuse of the Russia-Ukraine war, hasn’t provided explanations for over two years as to why the clients from South Africa or Mexico who are repaying their loans correctly and whose money is deposited in banks in those countries have not had a single euro returned to the lenders due to the blockade of Russian accounts.
Or for example, another highly recommended platform like Reinvest24, which invests in Real Estate, where I have over 30,000 euros invested in 40 projects, all 40 of which are delayed or having problems, not 10 or 20 but all 40, which is not normal even though delays are very common in Real Estate and not an indicator of default but rather of increased concern.
And these are just a few examples of how to know where to invest and where not to at any given time… not by following gurus with videos on YouTube with articles full of affiliate links so that the creator earns money regardless of the consequences, but by investing with someone who shows you where they have invested over 1 million euros.
Over the years, the gains have more than covered my losses, but I would have loved to see the real portfolio of someone who has tested a platform for years and who can warn me where there are more or fewer risks when investing, to invest safely.
I would have saved thousands of euros by investing in over 60 different platforms and would have focused on my 20 favorite platforms.
On this other post we present you the updated best P2P Crowdfunding Platforms.
We cannot create a perfect portfolio for you, as investment is very personal. It’s not the same for an 18-year-old who wants to start generating their first investments in amounts of 200 euros per month as it is for a 50-year-old who has just sold a property and wants to invest 300,000 euros. Or for a client who doesn’t mind taking on greater risk and trying to invest for returns of 13-15% annually as it is for one who prefers to aim for 9-11%. Or for someone who likes personal loans to individuals for the purchase of a car or a small loan with repayment terms of 1-2-3 months as it is for someone who prefers to invest in a loan for the expansion of a farm with a 5-year outlook, or the purchase of properties among many investors, to then rent the property out to tourists and sell it in about 3 years and make profits from both the rent and the sale.
It’s like selling jackets in a store, you can’t just have one size but you must have 6 sizes and 5 different colors for each garment.
But as a gift, I want to give you a shortlist of platforms where I would invest if I wanted to start investing in P2P:
As I mentioned before, I would start with Mintos for the diversity of loans and number of originators. It’s not the one offering the highest interest rates, but the size of the platform, as the largest in Europe, provides a lot of consistency to its investors. It doesn’t exclude that they have had loan originators with problems, but from the platform itself, they have fought to recover the money for their investors and have almost always succeeded. Let’s say you would get a 9-10% annual return, being able to invest in loans with maturities starting from 15 days, being able to automatically reinvest the interest earned each time, which means that at the end of the year, you could be averaging around 11-12% real interest earned.
Another platform would be Esketit where in recent years it has not had any problems, and the interest earned is around 12-13%. Similarly, taking advantage of automatic reinvestment, the loans are continuously fueled by compound interest profits.
In the Real Estate sector, I would invest in Estategurú, although as I mentioned, this is a sector where just like a loan to an individual has a specific delivery date and another for repayment, which is usually met, in real estate matters, delays in construction, obtaining permits, delays in marketing, or exaggerated sales expectations… make deadlines very likely to be missed, which leads to many loans appearing as delayed (they still produce interest, but I like to control when I can access my money and I don’t like it if I was supposed to receive my money on April 1st and end up receiving it on November 1st).
Another platform that has never had problems is Debitum where I am getting an 12% return.
One of my favorites is HeavyFinance, which invests in the agricultural sector and why I like it, because let’s not fool ourselves, the Real Estate sector has produced many successful companies that have then gone bankrupt due to greed, let’s say frankly that it is a sector very much about getting the maximum possible profit and if it goes wrong, take the money and run and see if you can catch me. In contrast, the mentality of the farmer is one of permanence, often it’s the family’s lands and the goal is to continue leaving them to the children, so when a loan is requested to buy machinery or more animals or more land, it’s usually fulfilled, and often they even receive European subsidies to the sector that further covers and guarantees their repayment. I am getting around 13% on this platform without investing in longer-term projects of a year that offer higher interest rates, but I prefer shorter terms in my investments.
Peerberry also stands out, although lately due to its success in recent years, it has a lot of demand from investors and little supply, so whenever there is money in the account, you have to be like in a market auction between 7:30 and 9:00 to invest quickly as soon as the loans come out. Automatic reinvestment exists or they say it exists, but the reality is that it doesn’t work. So if you don’t mind investing while brushing your teeth, you’ll get around 11% annually.
I would also highlight Viainvest with returns around 13% and Hive5 with up to 15%, and for now, meeting the invested loans. All these platforms are in Europe where the highest returns are obtained.
But we can offer our clients more than 400 platforms in over 20 countries. Nowadays, there’s no problem investing in any country in the world where you reside, although some platforms do not allow, for example, investing if you are not European, or others require you to be American or a resident, some admit both individuals and companies but others only individuals and others only qualified investors with much higher investment amounts. Finally, for those who would like to invest in the USA, I would like to mention, for example, GroundFloor with returns around 10%, investing in real estate properties and with a very good auto-investment option that ensures constant reinvestment of your funds.
To invest wisely, it’s crucial to understand where you’re investing and what the investment’s lifecycle will be, how to exit, risks, etc.
The P2P sector is easy to grasp, which makes it easier to decide where to invest compared to trying to understand CDs, securities, bonds, stocks, ETFs, cryptocurrencies, etc. However, like any structure, it needs solid foundations and ongoing maintenance to prolong its lifespan and keep it in optimal condition for many years.
That’s why at Carlia Consulting, we typically offer three types of services to our clients. The first one would be designing the portfolio with the client, laying the foundations. Here, we provide a detailed analysis of the main market platforms, including countries, interest rates offered, sectors – real estate, agriculture, loans, etc. – durations – short, medium, or long term -, client risk aversion levels. We will design your investment portfolio for you to manage from that point forward. This is the basic service.
Then we offer a premium service where we assist you for 1 month or up to 3 months in developing a broader portfolio or fine-tuning the investment portfolio as your knowledge grows and you decide to increase investment amounts.
There are also clients who opt for us to manage their investment portfolios over time, as they prefer not to have to monitor the market and platform developments. Even in these cases, we will never directly execute the investments ourselves, as for security reasons, access keys, income, and withdrawal accounts will always be managed personally by the client.
To ensure the greatest success for our clients, they will be able to see our investment portfolio, which guarantees that where we recommend investing, we have already invested for at least a couple of years, and the opinion offered is based on the experience gained from investing our own money. This gives us a lot of confidence since it’s usual that, by amount, the primary interest in providing the best advice is based on having our own funds invested in the same platforms.
For any inquiries, feel free to email us at carliaconsulting@hotmail.com
