What type of Investor are you? It’s an important question to ask yourself before entering any new investment, including an investment in Peer-to-Peer (P2P) loans.
Like any other investment, the risks involved in lending through a P2P platform will depend on a number of factors. Once you have established your attitude towards risk and have balanced it with your return requirement, you will start to understand what type of investor you are and then be able to find the right platform(s) and the right investments for you.
Within P2P Lending, risks will depend on who you are lending to (Consumer, SME, Property), the credit history of the borrower, whether the loan is secured or unsecured, and the security being offered.
Proplend’s transparent platform means investors can easily weigh up the risks of each investment. We also offer choices for each investor type and a team of experts to help you through the process.
PROPLEND INVESTOR TYPES
Proplend’s innovative Loan Tranche Model allows investors with different risk and return profiles to all participate in loans to the same borrower supported by the same security. The three LTV (Loan-to-Value) based Tranches give a clear guide to the investor types they will be suitable for and can be broken down into: Conservative, Moderate, and Aggressive.
Investors who identify themselves as conservative typically invest in Tranche A. Monies invested into Tranche A represent up to 50% LTV and therefore Tranche A investors are less likely to be susceptible to principal losses during liquidation unless the value of the property declines by more than 50%. To date, Tranche A provides the investor with average returns after fees of 6.28% per annum. Each individual loan is priced on a deal by deal basis.
Investors who identify themselves as moderate risk takers have typically invested in Tranche A and Tranche B. Monies invested into Tranche B represent investments from 51-65% LTV, therefore, Tranche B investors are moderately likely to be susceptible to principal losses during liquidation, should the value of the property decline by more than 35%. To date, Tranche B provides the investor an average return of 7.47% per annum after fees. Each individual loan is priced on a deal by deal basis.
Aggressive investors are most comfortable with the higher loan-to-value risk and higher interest rate returns. Monies invested into Tranche C represent investments from 66-75% LTV, therefore, Tranche C investors are likely to be susceptible to principal losses during liquidation should the value of the property decline by more than 25%. To date, Tranche C provides the investor an average return of 9.39% per annum after fees. Each individual loan is priced on a deal by deal basis.
To date Proplend has yet to report any late payments, defaults or investor losses.
So which type of investor are you?
REGISTER TODAY to view all available loans in Tranche A, B and C.
Proplend does not offer investment advice and your capital is at risk when making investments into commercial mortgages via the Proplend platform.