5 Common mistakes made by P2P investors

1
5 Common Mistakes made by P2P Investors
2

1. Investment without research
2. Lack of diversification
3. Not understanding risks associated with
   borrowers profile
4. Aggressive approach
5. Looking for quick returns

3
1. Investment without research

• Not all investment platforms follow a
  transparent process, so it becomes very important
  to do a thorough research.
• Lack of proper product knowledge which results
  in bad choices.
• The most common mistake one can do here is
  missing out on the product policies charges
  associated, which can reduce the final return you
  get.
• Thus, a proper research about the platform, the
  products on offer most importantly the numerous
  risks associated will help you to invest in the
  right way.

www.lendenclub.com
4
2. Lack of diversification

• Diversification is the key to reduce risks and
  improve returns.
• In P2P lending, there are different types of
  risks associated with different products as well
  as borrowers, thus it becomes important to
  maintain a portfolio where you invest across
  them.
• This in long term helps to suffer least from
  defaults.

www.lendenclub.com
5
3. Not understanding risks associated with
borrowers profile

• Considering diversification is very important
  while investing, but lending money to different
  borrowers with lower credit score could result in
  a disaster.
• It is very important to go through detailed
  information of all the borrowers, which will
  reduce the risk associated with your investment
  in his/her loan.
• Also, CIBIL score helps in determining the
  credibility of a borrower, so never ever miss it.
  

www.lendenclub.com
6
4. Aggressive approach

• If you are just starting out, in lieu of higher
  returns, you might directly go for high risk
  investments.
• Whenever you are investing in a new financial
  product, it becomes important to start slowly and
  first understand how it works.
• Always start with small investments across
  different products and after gaining adequate
  experience you can decide on how to build your
  portfolio for long term.

www.lendenclub.com
7
5. Looking for quick returns

• The biggest asset in investment is Patience.
• If you are looking for returns from Day 1, Peer
  to peer lending is not for you.
• It works the same way banks provide loans so
  there is also a risk of delayed repayments which
  cannot be ruled out.
• In P2P lending, reinvesting the money earned
  from returns helps you in successfully implement
  a long term approach, so be patient and earn
  higher returns with moderate risks.

www.lendenclub.com
8
To start investing in P2P download LenDenClub app
on android ios
www.lendenclub.com
9
Thank You
www.lendenclub.com