Social lending recommended for beginners to solve such questions as ” I don’t know which site to start” or “I don’t know which company (loan) to choose ” for those who are thinking of starting a new investment. Here are some tips from Loqudity for recommended social lending services for choosing a company and lender .
Key points when choosing a social lending service
1. Is there a bad debt or delay?
It is absolutely necessary to confirm whether there is a loan loss of the lender. Delays can occur, if not bad debts. If there is a delay, is there a solid guide? Is there a chance of repayment? You can rest assured that there are not a few social lending companies that publish. The ideal is a company that has never had a bad debt.
2. Whether or not there is collateral
If no collateral is set, there is a possibility of total loss. Make sure you have collateral in place, just in case.
3. Is there a large number of lenders?
The more lenders you have, the more you can choose the one that suits you best. In addition, it is not recommended to lend a large amount to one fund from the viewpoint of risk, so it is important to have a large number of lenders so that it is easy to diversify and lend.
Points when choosing a lender
1. What is the yield?
Check the yield of the deal. If the lender has a low yield, the interest rate at the time of lending will also be low, and it can be said that the project has a low repayment risk. While high-yielding lenders are highly profitable, they are also proportionally more likely to suffer losses. If you are a beginner, it is a good idea to start with a low yield and low risk.
2. How long is the operation period?
The operation period is fixed for each lender. The short operation period is about 3 months, but the long operation period is 2 to 3 years. Choosing a long-term lender can make you profitable for a long time. However, in principle, you cannot cancel the contract until maturity, and you cannot withdraw the loan.
Long-term lending also increases the risk of bankruptcy of the lender or social lending company during that period. Beginners should get used to selecting a lender with a short-term loan.
3. Is the lender transparent?
Check the lender’s information to see if the lender is likely to go bankrupt or if the loan is to a large company that is making a good profit.
With so many social lending services coming out in the last few years, the options have increased dramatically. Please enjoy the new investment of social lending and increase your experience points.