Bonus is in! Start building your wealth with P2P lending
Many of you would have received your bonuses in March and are deciding what to do with it. There is no definite way on how you should be utilising your bonus. Some choose to repay their outstanding debts, while others prefer to spend it all on luxury items as a way of rewarding themselves for a job well done in the past year.
Wealth building comes in various forms, from saving to investing, be it actively or passively, amongst other strategies. Today, let us introduce you to an alternative investment – Peer-to-Peer (P2P) Lending.
Although still in its adolescent stages, P2P lending has reshaped the financial landscape in Singapore over the past three years. Funding Societies offer SMEs additional avenues for business financing and give investors like yourself more chances to enhance your portfolios. As you see your wealth increase progressively, you’re likewise helping local SMEs develop their businesses.
Here are 4 reasons to think about placing part of your bonus into P2P lending:
1. It caters to all salary and bonus ranges
You need not have to have a high starting capital to start investing in P2P lending, though you may invest more depending on your appetite for risk. For example, Funding Societies allows you to make an investment from as low as $50. Not to mention, you only need to put in a $1,000 initial deposit (which can be withdrawn at no cost) with us before you are able to access investment opportunities. Accredited and institutional investors with larger capital and risk tolerance may also invest up to tens of thousands per investment.
2. Shorter Tenors means that you see your returns faster
If you are considering short-to-mid term investments, P2P lending is a plausible option for you. Many traditional investment products require long lock-in periods. P2P lending has a much shorter lock-in period as the loan tenors are usually shorter. The tenor for our Business Term Loans usually ranges from 1 – 12 months and from 30 – 90 days for Invoice Financing. Furthermore, you get monthly repayments from your investments in Business Term Loans (one-time repayment for Invoice Financing), which you can re-invest in new loans creating a compounding effect.
3. Potentially high returns: Up to 14% per annum
Due to its potential as a lucrative investment, P2P lending has become part of many investors’ wealth building strategy. Interest rates offered by Funding Societies typically range from 8% to 14% p.a.
While the main risk for investors in P2P lending are non-performing loans, we manage our default rates comparable to those of major banks. This is a result of our extensive credit assessment of the SMEs’ loan applications to give you the best investment opportunities.
4. It is easy to participate
Investing can often be rigorous due to the multiple tools and amount of monitoring required. However, P2P lending is simple to participate in:
- Simply look out for upcoming deals
- Read the respective fact sheets
- Decide on the amount you want to invest
Funding Societies makes it even simpler for you with our Auto-Invest function. You only need to pre-select your criteria for investment and the Auto-Invest function would help you select your investments. You will be notified of the selection and can decide whether you want to go ahead with the investment. This not only makes investment hassle-free, it also helps to diversify your P2P investment portfolio by participating in multiple loans.
Start your P2P investment journey today with Funding Societies!
Now that you have a clearer picture of P2P lending, consider putting a part of your bonus into P2P lending and potentially earn up to 14% returns. All of us here at Funding Societies are here to help you begin your P2P investment journey.
This article is written by Funding Societies and first appeared on MoneyDigest.