If you are one of those individuals looking for a good investment avenue, you must have heard about P2P lending. But you must keep these things in mind to earn awesome returns as a P2P lender:

Start Small, Build Big: Start small by investing 50k to 2 lacs depending on your risk appetite and then allow your loan portfolio to grow organically and steadily.

Diversify: Spread your investment across a large number of borrower profiles from different location, gender, occupation etc.

Decide Your Level: Decide for yourself your maximum/minimum loan amounts and the number of borrowers you want to invest in depending on your risk appetite.

Risk Averaging: Set yourself a target distribution of lower to higher risk profiles which can help you reach your expected returns. To spread risk, keep a good mix of all profiles.

Be Prepared to Lose Some: Plan for a few defaults when planning expected returns.

Tread Cautiously: Spread your risk by not sticking to just one risk category and create a portfolio with a mix of low, medium and high-risk borrowers

Value Transparency: Check the platform has certificate of registration as an NBFC-P2P, undertakes sound financial practices through an escrow account, undertakes transparent data management and provides research analytics to help make informed decisions. 

Reinvest: Enjoy the benefits of compounding by reinvesting your gains. 

Tax Compliance: A responsible P2P lender will ensure compliance with the law of land. Interest component of EMI’s (monthly repayments) received from the borrowers is taxable as per the taxation law that applies to the individual. 

Click here to read the full story: https://economictimes.indiatimes.com/wealth/p2p/top-9-things-to-keep-in-mind-to-earn-higher-returns-using-p2p-lending/articleshow/68171120.cms