This guide will show the process of investing in real-estate or business loans, using Monethera as an example. There will be differences from one platform to another, but the investment process will roughly follow the same outline.
The following steps displayed before investing at Monethera sum up the entire process :
Investors first have to create an account and fund it; they can then browse the available projects and select where to invest. Then, after investing in one or more projects, a little patience is required before reimbursements reach their account and they can re-invest !
Creating your account
The first step towards investing in loans is to create an account on the crowdlending platform. While there may be superficial differences, the process is roughly the same on all platforms.
There’s no option sign-up option visible on Monethera’s homepage. Indeed, prospective investors have to click on Sign in first, where the option to create an account appears. This small quirk is unfortunately present in many platforms.
At Monethera, required information for sign-up are :
- first and last name
- date of birth
- country of residence
- e-mail address
You’ll also have to define a password. The restrictions vary from one platform to another; here, the only constraint is that it should be at least 8 characters long.
The last step is to review and agree to various legal documents.
KYC (Know Your Costumer) procedure
At this point, it’s possible to access your dashboard by clicking on Profile icon at the top-left of the screen, and selecting Dashboard.
Trying to add funds by selecting the Deposit button will display the following message :
In order to upload the required documents, select the Profile menu again, and navigate to Documents.
Once more, the documents required for the KYC procedure KYC (Know Your Customer) checks are procedures used by financial businesses
in order to verify the identity of their clients. Most Crowdlending platforms will require
a copy of an identification document (identity card, passport, driving licence); an utility bill
or bank statement may be necessary as well. vary from one platform to another; however, they usually require at least a scan of an identification document (passport, ID card or driving license). In Monethera’s case, another document is required in order to verify your address. You may upload either a bank statement, or an utility bill. Because of privacy’s concern, I recommend to upload an utility bill, rather than a bank statement which contains sensitive information.
Validation may take up to 2 days; however, in most cases it will be a matter of hours if you upload them during business hours. You’ll receive an e-mail informing you when the documents are validated.
Funding your account
Once the KYC procedure is complete, it’s time to fund your account ! The following steps describe a typical account funding process using an online bank. If you’re still stuck in a traditional bank, the procedure is of course the same.
Many platforms set a minimum investment amount per project; it can be as high as € 100 for several business and real-estate crowdlending platforms. At Monethera, although this threshold is € 1, the minimal deposit amount is € 100. This low threshold is actually mostly useful when it comes to re-investing interests, as it means you will be able to put them to work immediately !
Adding a beneficiary
In order to display Monethera’s bank details, return to the dashboard and click the Deposit button. Many details are provided about the beneficiary account you should send money to; however, depending on your bank, only a few of them will be useful. My online bank only requires the beneficiary name, IBAN and bank name.
Initiating the SEPA transfer
After creating the beneficiary, it’s time to transfer some money ! It’s crucial not to forget the Payment details, which allows the platform to route the incoming funds to your account !
After a few days (2 business days usually), you’ll receive a notification that the funds are available.
Now that the funds reached your account, it’s time to invest them ! Platform that feature business and real-estate loans usually follow a different process than those for individual loans. At Monethera (and many competitors), there’s no auto-invest Auto-invest is a tool provided by most platforms; it allows investors to define the
characteristics of the loans they wants to invest in, and let the system choose the
individual loans based on these criteria. The benefits of using auto-invest is a
gain of time, and a larger diversification of the portfolio. feature; investors have to select loans manually.
Browsing available projects
The Projects menu item at the top of the screen will take you to Monethera‘s projects list.
Clicking on a project will take you to the detailed project page. There, you’ll find details about the borrower, as well as about the loan’s purpose. The level of details provided vary greatly from one project to another; I find Monethera’s descriptions both insightful and pleasant to read.
Investing in a project
Investments are carried directly from detailed project description page. Just scroll down to the bottom, input the desired amount and press Invest !
At this point, your dashboard reflects the repayment schedule of your new investment. Similarly, the Investments page of your profile will be updated accordingly.
Depending on your portfolio’s size, you may repeat the process with different projects. After one month, interests will start to kick in !
Receiving the interests
Monethera‘s current projects yield interests on the 1st day of the month. At this date, the balance on your dashboard will reflect the received interests. They’re also visible on the “Statements” menu, as can be seen in the following screenshot.
At this point, I strongly advise you to take advantage of interests compounding by immediately re-investing interests. Of course, it’s also possible to withdraw them; from the dashboard, the “Withdraw” button will allow you to input the sum to withdraw.
Increasing your account’s safety by enabling 2-factors authentication
2-factors authentication – also known under the acronym 2FA – simply means that another safety layer will be used in addition to the password. When logging in to a 2FA-enabled website, you’ll have to supply your password, as usual. In addition, a code generated by an application on your cell phone will be required. On my Android phone, I use Google Authenticator.
Generated codes have a very short lifespan – 30 seconds -. The remaining time is shown on the right of the screen; in the screenshot above, the half-filled disk means that these codes are still valid for 15 seconds. When the time is up, another code is automatically generated.
Note that the application works offline, so it’s easy to use it abroad. However, it requires the clock to be exact, so connecting to a Wifi with automatic time adjustment enabled won’t hurt. I ran into troubles in China, where my phone used the wrong timezone; I thus had to select it manually in order for the authentication to succeed.
Enabling 2FA at Monethera is easy; selecting the matching option in the main menu will take you to a screen which displays a QR code. Scan it using your authentication app, and enter the generated code in the provided space.
The platform will also display several codes which you may use if you lose access to your phone. I advise you to print them and store them in a safe place !
On subsequent logins, Monethera will ask you for a code generated by the app, as can be seen in the following screenshot.
Time to choose where to invest
Congratulations ! You’ve now finished reading our documentation on investing in loans.
In order to learn more about the platforms reviewed on Alternative Investments, you have several opportunities :
- Use our index of reviews of crowd-lending and P2P lending platforms, and read the ones matching your investor’s profile !
- Check the most recent post about my favorite platforms
- Investors interested mostly in individual loans may read my detailed comparison of peer-to-peer platforms
- There’s of course an equivalent comparison of business and real-estate crowlending platforms
- Alternatively, those seeking a hassle-free investing experience may read my comparison of platforms offering trivial ways to invest
Happy investing, and don’t hesitate to get in touch if you still have questions !