The principle is very simple : through the platform, an investor lends some money to an individual or a business. The borrower will then pay interests to the investor (usually monthly); at the end of the loan’s duration, the capital will also be reimbursed. The borrower may be either an individual or a business. Note that each loan is usually split between many investors. This helps spreading the risk between all lenders.
While the ergonomics will vary from one platform to another, the process of investing in loans itself is usually simple. All platforms will let you choose your loans manually if you wish too; however, it may be time-consuming, and even tedious if your have a large portfolio and want to diversify it. In this case, it’s possible to use the auto-invest feature; it allows you to select the loans categories that interest you. The system will select the loans automatically based on your choices. Again, this will reduce risk as it’s very easy to spread the invested amount between many loans.
The hardest part is deciding how much risk you want to take, or seen the other way, which interest rate you target.