Peer-to-peer (P2P) lending investment has grown in popularity in recent years for its potential to generate impressive returns. For investors, P2P lending provides a number of attractive advantages over traditional investments along with some potential risks. In this article, we will explore the positive benefits of P2P lending investment.

Low Initial Investment:
One of the primary advantages of peer-to-peer lending is its low cost. Most platforms require a minimum initial investment amount of around $50USD. Investors can spread their capital across multiple loans to mitigate risk, and most platforms charge a flat fee for investments which average around 2%. By comparison, investing through the stock market would require at least $500USD and could involve several extra costs such as broker fees which could further increase the outlay.

High Returns:
P2P lending investment generally provides higher returns than traditional investments. Since borrowers’ payments cover the cost of the loan and some extra, P2P lenders can earn an average return of 7-13% per annum on their investments.

Minimal Risk:
Another benefit of P2P lending is its lower risk. Most platforms are heavily regulated and the loan agreement is backed by a specific asset such as a car or property. This will reduce the chance of borrowers defaulting on their loans as they are more likely to pay it back to avoid having their asset taken away from them.

Flexible:
Finally, P2P lending is very flexible. Investors can easily diversify their portfolios by investing in numerous loan contracts and adding or withdrawing cash in a matter of clicks. Furthermore, P2P investments are liquidated quickly and are less subject to big market swings which would increase uncertainty and affect returns.

In summary, the positive benefits of P2P lending investment far outweigh the risks associated with the industry. Low initial investment, high annual returns, minimal risk and flexibility are all key attractions for new and experienced investors alike.