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Are you a hands-on investor who enjoys evaluating investment opportunities and finding a diamond in the rough? If so you may want to consider investing in peer to peer lending. As a peer to peer lender you have the opportunity to review individual borrower applications and select the ones that you think are going to repay their loans.

What is Peer to Peer Lending?

For those of you not familiar with peer to peer lending (also know as P2P lending), let’s take a moment for a quick introduction. In the past ten years several websites (known as platforms) like LendingClub and Prosper have sprung up offering personal loans to individuals. This is certainly not unique but what makes them different is that they are not banks or financial institutions in the traditional sense. These websites get funding for the loans they provide from individual investors in amounts as small as $2,500. In a sense, anyone can be a banker with just a small amount of money. The signup process is quick and easy, and as soon as you transfer the funds you can start investing.

How Do You Invest in Peer to Peer Loans?

The process for P2P lending investing is pretty simple. Once you have opened and funded your account you will be able to see all of the loan applications that the platform has approved. These loan applications have been evaluated based on industry standard underwriting techniques and many are rejected. The ones that are approved are rated and the highest rated borrowers get the lowest interest rates.

Lenders review the approved loan applications and decide which loans they would like to invest in based on their comfort level with risk and their desired return. Investment in a loan can be as little as $25 and most experts recommend investing the minimum amount and spreading your portfolio over as many loans as possible in order to minimize risk through diversification. This is where you get to Do-It-Yourself. The platform provides dozens of pieces of information from the loan application and the borrower’s credit history. You get to determine which factors matter, how much to weigh them and what a good borrower profile looks like. To some people this may sound boring and tedious but for many investing junkies this is the fun part. You can look at data like length of employment, debt-to-income ratio, home ownership vs. renting, late payments, outstanding debt, bankruptcies and so much more.

There are a limited number of filters available on the platforms that allow you to quickly find loans that meet certain criteria, then you can review them in the more detail individually. Or, for the really hardcore investment analysis junkies, the information for all available loans can be downloaded to a spreadsheet for study and review. There are approximately 50 to 250 loans available at any given time and there are approximately 80 pieces of information available so, as you can imagine, this can be an enormous amount of data to review. However, with some simple sorting and filtering in your spreadsheet you can pretty easily identify the loans that meet your criteria.

There is also room for intuition and past experience in the analysis process. There may be more loans that meet your criteria than you have funds to invest. Ultimately, you may have to ‘go with your gut’ in order to select the loan or loans that you think are most likely to be paid back.

For those who want passive income or do not feel they are savvy enough to select quality loans there is also an auto invest feature that will choose the loans for you based on your desired risk/return level. But for the investment analysis enthusiast the DIY approach is the way to do. All in all, this can be a fun way to achieve a great return on your investment.

These days, credit cards are driving the consumer market all around the globe. This is a mode of payment that yields benefits like car rental coverage, cash-back points, and automated payments just to simplify our lives.

However, a user needs to be aware of the ways in which a con artist can misuse these credit cards. It’s truly essential as these cards can yield disastrous outcomes when misused. With cards depicting high APR, you may find it tough to pull out of your debt burden. Avoiding debt is your only way out this problem.

You may do your research on using credit cards if you really wish to handle them responsibly. You may come across several online resources illustrating the use of credit cards regardless of whether you’re applying for your first card or is paying off dues to improve your credit rating. While repaying your credit card debt, you must arrive at an affordable minimum payment like when you calculated your personal loan EMI.

Know how to use your credit cards from now on:

1. Repay Your Credit Card Balance Each Month

You must stay focused on repaying your credit card dues every month. You shouldn’t find an excuse since it charges more out of your bank account once you fail to live up to these payments.

You’ll need to bear an interest worth up to 25% based on the outstanding credit balance if you fail to make a payment or opt for making a minimum payment.

You can only keep high rates of interest from piling up if you pay off your dues each month. You must also refrain from skipping a payment. You might have to pay a penalty interest (up to an APR worth 30%) in case you miss out on a due date. Your credit score takes a hit when you actually need to pay a penalty.

2. Restrict Credit Utilization to a bare minimum

Apart from improving your credit score, it will even help in restricting your debt. Credit utilization is the metric that constitutes a large portion of your credit score. Your FICO score tends to rise when your credit utilization falls.

For instance, your credit utilization looks great when it’s valued at 16% after you’ve used 2 credit cards with a balance worth $600 and a combined limit of $3,100. In order to fetch the maximum benefits, you may choose to restrict it below 30%. While avoiding the risk of acquiring debt, you’ll even enjoy an improved credit score.

3. Avoid Using Multiple Credit Cards Simultaneously

You may be lured by the benefits of opening several credit cards especially when you’re seeking the advantage of being a new cardholder or attempting to redeem reward points. You may be thrilled to make the most of cash-back or 0% APR offers. However, you must refrain from opening multiple accounts till you’ve learned to use a single card responsibly.

Chances of overspending get increased when you have several cards in your arsenal. You may even miss out on a due date. You must restrict the number of cards in your wallet as you won’t like to fall prey to any of these incidents.
Credit cards are indeed a very useful tool when you know how to use them properly. By considering the tips mentioned above, you may certainly walk a step forward and repair your credit rating. It will help in securing the financial future of your loved ones.

It’s not advisable that you keep your surplus funds in a regular savings account for long. In that case, you can’t just expect a high ROI against this fund. You may choose to go with multiple options like mutual funds and shares, but they have an element of risk. The risks are much lower with FD investments as they’re regulated.

What’s so special about Fixed Deposits?

You may open FD account while you’re looking for some safe and sound investment option. Besides being safe, FDs yield a lucrative rate of interest for the investors. You may earn quality interests on the amount that goes out in your FD account for a certain period.

1. Fixed Deposits create earning opportunities by compounding interests

FDs yield interest for over a uniform period when issued by banks. If you don’t need the amount of interest to come as regular quarterly or monthly income, you may consider reinvesting in your FD account. You’re likely to witness a growth of the principal amount and the interest of the upcoming period will be ascertained on the new value. In this way, you’ll end up earning more on the invested amount. All you need to do is to pick your payment option besides opting for the compounded FD option. You may use any FD calculator online to check the returns.

2. Sound investment option for senior citizens

You may consider an FD among the most lucrative investment options when you don’t have a source of steady income, especially when you’re old and retired. Many of the Indian banks provide you with an FD account and abide by the safety norms laid out for protecting your invested principal. The rates of interest might not be very high, but you may still gain something on these deposits. Under circumstances when you’re heading towards a financial crisis, you may close all FDs even if they haven’t matured.

3. Fixed Deposits yield tax-saving opportunities

FDs come with great tax saving options when you’re specifically interested in investing a portion of your funds for a long term. You may avail them in the form of a 5-year term deposit and set your money to be locked in for those 5 years. Until the maturity of your FD, you won’t be able to achieve credits or loans on your fixed deposits and can’t break them. With tax saver FDs, you may enjoy tax exemption on the principal amount invested by you. Depending on the tax slab, taxes are levied on the interest.

4. Fixed Deposits are much safer

The RBI governs all FD schemes that are issued by the NBFC and Indian banks. Issuers of these schemes are required to follow certain stringent regulations and rules from time to time. In India, the banking industry is safer for the investors as most saving schemes yield adequate protection towards the principal.

If you’re not among those who looks for a high ROI then you may be in need of a more secure investment. FDs are certainly one of those safer schemes that you’ve been looking for. All of your capital is in safe hands as the FDs are regulated by stringent norms laid down by the government authorities. That is also the reason why FDs are considered so safe for the members of low-income groups that don’t possess any alternative source of income.

If you’re taking out your first online personal loan, it probably means you don’t have a credit history or a credit score. This doesn’t however hold true if you’ve had or currently have a credit card (if you’ve had a credit card in the past, you’ll have a credit score). Lenders use your credit score obtained from your credit report to understand how good you’ve been at managing credit in the past. Personal loans are unsecured loans that don’t involve collateral, and usually come with a higher interest rate in comparison to secured loans. This is precisely the reason why having a good credit score is important for your application to get approved.

Let’s forget the credit score part for now. If you’re a first timer, here are some things you should note before taking your first unsecured personal loan:

Know the various charges involved

Personal loans come with a list of charges that include late payment charges, EMI bounce charges, processing charges, pre-closure charges, and part-payment charges. When you’re taking out your personal loan for the first time, make sure you are aware of the various charges. It is of course, always good to be aware about how much lenders are charging you.

Choose a short repayment period

Choosing a short repayment period helps reduce the interest payment over the course of your loan tenure. Longer tenures attract higher interest payments, but lower monthly repayment amounts. As your first loan, you wouldn’t want to pay too much interest, do you? However, if lower monthly repayments suit you, you should go ahead and choose a longer tenure, for you can always pre-close your loan after a certain period. Note that most lenders require you to complete a minimum of 6 months or 12 months of your tenure before you can pre-close.

Don’t borrow more than you need

Your approved amount might be higher than what you asked for – lenders use this tactic to make you borrow more. Don’t fall for it thought. Borrow only how much you need. Borrowing more than you need is just setting the platform for unnecessary debt accumulation.

Negotiate the interest rate

Negotiating the rate with the bank will help you get a lower interest rate on your loan. Moreover, if you don’t have a credit history, there’d be multiple lenders in the market willing to offer you a loan. Going by this logic, it is advised that you negotiate the interest rate on your loan to get a reduced rate.

Don’t apply with multiple lenders

Applying with multiple lenders negatively affects your credit score. Too many credit inquiries reflect credit-hungry behavior, and lenders can reject you on the basis of this – rejections bring down your credit score as well. So for starters, make sure you apply with only one lender.

As the saying goes—out of sight, out of mind. And for many, this has been the motto for their pensions. However, the launch of auto-enrolment schemes, increased media coverage and a growing awareness of retirement has shifted these attitudes.

According to the Q2 2017 edition of the Tackling The Savings Gap Consumer Savings and Debt Data report, 598,000 employers were enrolled in a workplace pension scheme. Over the 12-month period, they contributed a collective £87.1 billion. With the popularity of personal pensions continuing, it’s clear to see that Britain is certainly more aware of their pension responsibilities.

Could our other financial commitments be holding back our personal pension savings? The Q3 2017 edition of the report suggests so. During the quarter, 45% of survey respondents failed to make a pension contribution; this was most common in 45 to 54 year-olds (47%). 18 to 24 year-olds had the second largest proportion of people who failed to contribute (44%).

Consider the above in relation to what the report also found. Findings show that a third of its respondents worry about money on a daily basis, while 37% admitted to lying about their debt. Perhaps then it’s not because of a lack of awareness; it may be because their financial situation simply won’t allow them to make a contribution.

Pension contributors added £203 on average to their pensions during Q3 2017. In contrast, the average amount of debt taken on by UK consumers each month stood at £370—significantly higher than the amount put towards their pensions.

A total of £143 per month is spent on average on purchases that are later regretted, the Q3 2017 report found. This includes purchases across food, clothes, alcohol and other items. If this money was invested in a pension instead for the full span from age 30 to 65, it could translate into almost £320,000. Based on the fact that Brits believe they will need £23,000 annually to live comfortably in retirement, this amount would be enough to fund 13 years of retirement.

This monthly spend breaks down to £4.70 per day. As the above example shows, investing this amount instead could lead to a comfortable start to your pension pot for retirement. As such, we shouldn’t underestimate the impact that small yet regular contributions can have. This underlines the importance of better financial management to allow us the capacity to add such funds to our pension pots.

To help you learn more about how much you could potentially need for retirement, True Potential Investor has created the Saving For Retirement: How Much Will You Need? quiz. By answering a series of questions, you can get an idea of the potential pension pot you’ll need—take the quiz today to find out more.