Getting started

The minimum amount varies from platform to platform, and also depends on the loan kind.

For personal loans, the minimal amount per loan is usually around €10. However, in order to have some diversification in your portfolio, a more realistic amount would be €200 (that is, 20 loans).

Business and real-estate loans usually have a higher minimal amount, often €50; this obviously makes it harder to diversify a small loans portfolio.

This will obviously depend on how much risk you’re willing to take. Conservative real-estate loans at EstateGuru yield around 11% annually, while Envestio‘s most speculative loans yield more than 20% annually. Returns for individual loans are lower, usually ranging from 12% to 15% annually.

At the end of July 2019, my portfolio’s overall performance was 13.83%.

While it varies from one platform to another, most of them accept people above 18 from the whole European union.

One great advantage of investing in loans instead of equities or even mutual funds is that no financial knowledge is required. Individual loans with a buyback guarantee [?] can all be summed up by three basic parameters about the loan : it amount, duration and interest rate.

Opening an account is usually extremely straightforward. Investors need to provide basic information about themselves, and usually upload a copy of some ID in order to comply with KYC (Know Your Customer) regulations. The registration itself usually takes two minutes or less, while the documents checking may require up to two business days.

Investing process

It mostly depends on the kind of loans you’re investing to. Using auto-invest[?] on a peer-to-peer platform basically means that all you have to do is watch your account grow. On the other hand, investing manually on real-estate or business loans may require a few minutes to read about the project each time a new opportunity comes.

Overall it’s safe to say that even with a large portfolio, you’ll probably spend less than one hour each week managing your loans.

Some platforms provide a secondary market[?] which allows investors to sell their loans to other investors. However, not all platforms provide this feature; even if it’s offered, you’ll probably have to sell your loans at a discounted price, lowering your overall profits.
For real-estate and business loans, several platform offer to buy back your loans; the fees are usually rather high, around 5%, making it a last-resort option.
Bottom line : please, don’t invest money you may need.

Misc questions

These three terms are usually used in a rather loose way, even by the platforms themselves.

However, in its strictest meaning, peer-to-peer lending refers to loans to individuals. Crowdlending refers to the general activity of splitting a large loan between many investors; as such, P2P lending is a subset of crowdlending. Crowdfunding is often used as a synonym for crowdlending; however this is rather incorrect, as crowdlending usually doesn’t involve a monetary reward.

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