P2P – Explained in less than two minutes
FAQ – Frequently asked questions on P2P loans and P2P platforms
What are P2P loans?Many investors are increasingly asking themselves what P2P loans are actually about. One speaks of loans that are granted to private individuals. Both parties are private in nature and operate via the respective P2P platform. In contrast to conventional loans, banks and credit institutions have no say in such transactions. This distinguishes P2P loans enormously, because the money lending is done exclusively by private persons. As in many areas of the Internet, the digital change has brought about a new area. P2P loans have positive aspects for borrowers and lenders and have been enormously popular for years.
How does P2P work?The principle of P2P loans is basically relatively simple. The borrower registers on a platform, goes through a credit check and can then submit a credit application in the form of a project online. The other party can be you and you look at the different projects. Once you have found a suitable loan, you get in and can benefit from lucrative interest rates. Many people now wonder why the P2P platforms can offer such high interest rates. Well, the question is relatively easy to answer. The bank and with it the expensive administration fees are omitted and therefore these conditions can be offered.
What are the advantages of P2P loans?
Now in the first step, it is first of all necessary to differentiate the advantages between lenders and borrowers. Because both borrowers and lenders have enormous advantages with P2P loans.
Advantages for borrowers
P2P loans have the advantage for private individuals to get a loan Many people are self-employed nowadays, for example, and are rejected by banks. The P2P platforms act as intermediaries and enable private users to obtain a loan nevertheless. These are the advantages for borrowers.
Advantages for lenders
Lenders move into the role of investors and receive lucrative returns via the P2P platforms. Accordingly, both parties benefit from P2P lending.
What is better – P2P loans or ETF’s?
These two forms of investment cannot be directly compared with each other. P2P loans have a higher risk than ETF’s, but also a higher return. With ETF’s you always invest in stock indices. With P2P investments you lend money to private individuals.
Difference between P2P and crowdfunding?Crowdfunding is often equated with P2P loans, but this is completely wrong. First of all, it’s not crowdfunding, what you do as an investor, it’s crowdlending. You lend money to companies who want to invest or often start-ups. These companies get money from several private investors and then pay interest. In P2P, private individuals lend money to private individuals. The P2P market is much bigger than the crowdlending market and there are top platforms, as shown in the comparison.
Generate passive income with P2P?
This question is asked very often. Yes, it is possible to build up passive income with P2P credits. You get interest on the money you have been tempted to spend and thus you are able to add money passively. But to live on it, you would have to invest a very high amount of money, which would be highly speculative.
Estateguru – Information on the platformEstateguru was founded in Estonia at the end of 2014. The objective of Estateguru is to do business with companies and not with private persons. That is why this P2P credit provider is very different from the other P2P providers. Companies that need a loan for a real estate project in Estonia, Latvia or Lithuania can have their property financed by private investors through Estateguru. Since Estateguru only invests in real estate projects, the minimum investment amount for a loan is slightly higher. You must invest at least 50€ per loan. However, this minimum investment amount is rather low in this industry. So it is much easier to build a broadly diversified portfolio. You can reduce your default risk by investing e.g. 500€ in 10 real estate projects. Since these are real estate projects, the return is very high. On average the return is about 12 percent. Nevertheless, you should invest in more than 10 real estate projects to minimize your risk even further. Estateguru is perfect for investors who want to make a little more investment.
The advantages of Estateguru
As an investor at Estateguru you benefit from a number of advantages, which we have listed below:
Market leader in real estate loans
The disadvantages of Estateguru
Just like with Mintos, Bondora and Co. we would like to tell you of course not only the strengths of Estateguru. Around the topic of P2P credits it is important to analyze the weaknesses of a platform. Estateguru has the following disadvantages compared to other P2P credit providers:
The minimum deposit of 50 € is relatively high
Tied to the credit agreement for the entire duration
Helpful videos for EstateguruHere are the best video tips for Estateguru.
Other strong P2P platforms not included in the testJust click on the logo of the respective P2P platform to learn more and get a bonus!
Average yield of the individual P2P platformsJust click on the bar of each P2P platform to learn more and get a bonus!
- BULKESTATE 15,32% 15,32%
- IOVU GROUP 15% 15%
- MINTOS 12,11% 12,11%
- ESTATEGURU 12,03% 12,03%
- ROBOCASH 12% 12%
- FASTINVEST 11,62% 11,62%
- PEERBERRY 11,53% 11,53%
- VIAINVEST 11% 11%
- BONDORA 10,5% 10,5%
- AUXMONEY 5,0% 5,0%