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My experience with P2P lending

Discussion in 'Investing and Trading' started by Ikke, Nov 13, 2017 at 2:19 PM.

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  1. Ikke
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    Ikke Bronze Contributor Speedway Pass

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    Reading some of the negative comments on here about P2P investing, I thought I would share my positive experience to show it is not all doom. If you wish to give P2P lending a try on the platform that I use (www.mintos.com). There is currently a 1% affiliate bonus on the platform for the person signing up and the person who refers. You will need the code "FR9LIO".

    Don't be over enthusiastic, these platforms will always be a risk and your result may not be the same as mine. I don't trust this with my life savings, but it is a great way to make hustle profits work for me.

    I started in september 2015 with €50 on Mintos.com. I choose for Mintos because this is a platform that brings investors and non-bank lending companies together. These companies all have to filter out the customers to who they lend the money. And they have a incentive to do good because all the lending companies have to keep a part of the loans on their books.

    Over time I added some profits from small hustles and some small excess business profits that had no purpose. In total I have deposited €4000 and withdrawn €200, leaving at this moment €3800 in outstanding principal.

    upload_2017-11-13_19-38-39.png

    Over time I received €830 in interest. Which currently makes a 12.90% NAR (Net Annual Return). I have lost on some of these loans, but have learned to filter more wisely.

    I currently buy my loans with an automatic investment portfolio. I have set the following filters:
    • Loans need to come with a buy back guarantee. This is a guarantee that the lending company will buy back the loan with interest if it is 60 or more days delinquent. This is my first line of safety.
    • Loans need to have a collateral. The loan may not be more than 71% of the collateral. The collateral is often a car and they can depreciate fast. You don't want to expose yourself to this risk. This is my second line of safety.
    • Interest of 12.5% or higher. Investing on these platforms is still a risk. A reward is needed.
    • The loans may not be longer than 72 months. This to make sure collateral depreciation is in line with loan payments.
    • Loans have to be fully amortized. Lenders can often afford the monthly payment, but a big end of line bullet payment may be to big for the consumer to pay. A bullet payment also increases the chance that the collateral will depreciate faster than the loan is paid off. Again a risk you don't want to expose yourself to.
    I hope my post has shown how P2P lending works for me. And I hope more people will understand P2P lending as a concept. But also understand the risk P2P carries.

    IKke
     

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  2. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    My experience with P2P lending spawned this thread...

    *UNSCRIPTED* - What's your focus? Making pennies? Or Millions?

    I'm not interested in wasting hundreds of hours on something just so I can eek out an extra $92 a month.

    Thank you for sharing. Perhaps Mintos and the EU counterpart of the American version is a different story.

    My experience with P2P is a bunch of Sidewalkers looking to do one final scam before they file BK.
     
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  3. Ikke
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    Ikke Bronze Contributor Speedway Pass

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    I fully agree with you about not spending all your time to get a few extra bucks.

    I myself only check my account about once a month and let auto invest do the rest. I have invested time initially to set the parameters but it has been working on itself for quite some time now.

    And as for the scamming sidewalkers. I think that it being a platform for lending companies help a lot in this regard.

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