P2P Investor: How Much Of A Difference Will You Make?
The average rate of interest paid to savers in the UK has plummeted in the past ten to fifteen years. The Bank of England base rate has fallen from a high of 5.75% to just 0.10% today.
It means savers have been looking beyond traditional cash-saving accounts to find a better home for their money. As recently as 2008, savers could earn as much as 4% interest on an easy-access account. And 6% or 7% on a one-year bond. Unfortunately, savers are now unable to find anywhere paying more than about 1.5%. The decline in interest rates in recent times has contributed to the rise in the popularity of peer-to-peer (P2P) lending.
Typically, as a P2P investor, you can expect to earn anywhere between 2% and 10% a year. The rate of interest on offer will vary between providers. It will ultimately depend on how long you wish to invest for and who you want to lend to. In addition to whether that is on a secured or unsecured basis.
The P2P lending model means that you are cutting out the “middle man” and lending directly to the individual or business. In our case, the money is lent to students looking to progress with postgraduate education and other professional qualifications. This means on our platform, you are earning a real return whilst making a difference with a positive impact investment.
Like all investments, diversification and risk are very important aspects to manage. Our platform offers functionality such as AutoLend, which enables investors to manage their risk appetite effectively. One of the reasons we founded the business was because we knew that high street banks were not helping people wishing to borrow money for higher education. Investors of Lendwise can expect to achieve returns of approximately 8% per annum from a diversified pool of loans.
However, investments in individual loans can reach up to 10% a year. Being able to generate healthy returns while also making a positive social impact is what sets Lendwise apart from other P2P lenders. Benjamin Franklin, one of the founding fathers of the United States once said: “An investment in knowledge pays the best interest.”
Student Experience Stories
We like to think that’s true of both our investors and our borrowers. To read stories about student education that was possible with a Lendwise loan, click here.
This financial promotion is issued by Lendwise Ltd, which is authorised and regulated by the Financial Conduct Authority under firm registration number 782496. Lendwise Ltd is not covered by the Financial Services Compensation Scheme. Our products place capital at risk and you may not get back the full amount you lend and/ or the interest you expect. You should consider seeking independent tax and financial advice before making a peer-to-peer loan.