Invest with profitability in loans

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

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

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

The security of investing with profitability in loans between individuals


Here we begin in matter.

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

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

Do you remember that nice announcement by Sean Cole?

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 sole guarantee that our friendship or closeness guarantees the return of 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 give it back to you?

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

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 default to seize that guarantee to return his investment.

Invest with profitability in loans with real guarantee

Invest with profitability in loans with real guarantee

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

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 desert palace may have less value than a building in downtown Manhattan.

Every investor has to take into account that if an investment does not return in its term and its guarantee has to be seized and adjudicated, it is necessary to assess what outlets this guarantee can have.

However, when a loan is made between private individuals with a mortgage guarantee, the law requires that an appraisal be made by an appraisal company approved by the Good Bank . 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 performing a foreclosure.

Profitability and return on a loan between individuals

Profitability and return on a loan between individuals

When an investment is made we always have two things in mind, profitability and return . The return on a loan between individuals is marked by the investor and the valuation he wants to contribute to it. The percentage given that it acquires investment responsibility is always higher than that of a traditional bank loan and currently is not usually less than 8%. Only the contribution 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 of an investment in loans has an agreed term of beginning in a public deed. This term may have a duration of 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 cancel 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 with profitability in loans is a serious and real alternative to move part of our capital with high profitability.

About Wilhelmina Go

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