Invest profitably in loans

Although many of our users know our working method, they always ask us for more information on how to invest profitably in loans between individuals .

Although many of our users know our working method, they always ask us for more information on how to invest profitably in loans between individuals .

Most are investors with experience in banking products, the stock market or real estate investment, but when they hear that lending money is a good investment method, they have a lot of doubts.

1#. The security of investing profitably in loans between individuals

Here we begin in matter.

Loans between individuals or P2P loans have the advantage of offering a high profitability that can range from 8% to 18% or higher, but it can also have the problem that the return on investment is delayed due to a default or in many In cases the loan claim falls on deaf ears, everything will depend on the collection guarantees you have.

Therefore, the basis of the security of a loan between individuals is the guarantee .

✔ I feel safeooooooo

Do you remember that nice advertisement by Pepe Reina?

Well, we can also transfer it when it comes to lending money

We have all had experiences in lending money to a family member or friend with the only guarantee that our friendship or closeness guarantees the return of the money. But when a stranger asks you for money knowing that you can lend it to him, what guarantees do you have that he will return it to you?

In most cases the guarantee provided by an individual is his personal guarantee and this will be responsible for his debt with all his present and future assets. The problem is that if the individual does not pay and their assets are mortgaged or simply do not have, you will enter a legal claim that can last for years. To that, add the attorney's fees plus lawyers that you will have to advance and that will not always guarantee the collection of the debt.

The solution to all these problems is that the individual to whom the money is lent has a real guarantee . This guarantee will provide a security to the investor that will allow him in case of non-payment to seize that guarantee to return his investment.

2#. Invest profitably in secured loans

When an investor intends to invest in P2P loans , his greatest difficulty will be the valuation on his part of the guarantee or guarantees provided. An investor may have knowledge of the area where he lives or his vacation spot, he may also believe that in large provincial capitals a guarantee has an important value, but what value can a guarantee have exactly?

A property has a market value that is the sum of its construction characteristics, its qualities, its situation and the state of the market that surrounds it. This means that a palace in the desert may be worth less than a building in downtown Manhattan.

Every investor has to bear in mind that if an investment does not return within its term and its guarantee has to be seized and awarded, it is necessary to assess what outputs said guarantee may have.

However, when a loan is made between individuals with a real mortgage guarantee, the law requires that an appraisal be provided by an appraisal company approved by the Bank of Spain . This appraisal will always give us a real subjective value of the property that will be provided as collateral, said value will be taken into consideration when preparing the corresponding minute and its appraisal for auction in the case of foreclosure.

3#. Profitability and return on a loan between individuals

When an investment is made, we always have two things in mind: profitability and return . The profitability of a loan between individuals is marked by the investor and the assessment he wants to contribute to it. The percentage given that it acquires the investment responsibility is always usually higher than that of a traditional bank loan and currently it is not usually less than 8%. Only the provision of a good guarantee with a considerable market value can allow a more competitive interest rate or more interesting conditions to guarantee a good investment.

The return on an investment in loans has an agreed starting period in a public deed. This term can last one year or several if the investor allows its renewal.

The way in which the borrower repays the loan can be varied. The sale of the property, the bank re-mortgage, or the collection of money to pay off your debts by other means.

What is clear is that if we make numbers and compare them with other forms of investment, this method of investing profitably in loans is a serious and real alternative to move part of our capital with high profitability.

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