Investor strategies on the JBank P2P platform
In general, different investment strategies are suitable for every platform and the investor should spend some time studying the aim of the platform. The choice of strategy for investors is determined by the very essence of Peer 2 Peer investments, namely the rule of one investor = one borrower. Such a rule brings the investor the disadvantage of the risk of his entire investment, but above all the advantage of the entire yield of the loan only for the investor. This is how our platform works and this way, we can differentiate ourselves from other domestic and foreign P2P platforms, where multiple investors, for example, invest into one loan. Investment strategies on the JBank platform can be divided into several categories:
Investments in riskier and smaller loans with borrowers without proof of income
We enable our investors to lend to the borrower amounts starting at 5.000 CZK. Very often, this strategy is used by people at the beginning, when they want to get acquainted with investments in P2P loans and with the overall functioning of our platform. The disadvantage of the strategy is a relatively small yield in absolute numbers, because even with a higher interest rate of 50% per year for a loan of CZK 5,000 and a loan maturity of 12 months, the total return for the investor is 1.456 CZK, which is not much, but for a beginner this strategy might definitely be a benefit.
Investments into short term loans
This strategy is suitable for investors who do not want or cannot invest into longer time horizons and prefer loans for 6 to 12 months. It can also serve as a starting strategy for beginner investors. The advantage is, of course, a shorter maturity, the disadvantage is often a lower yield compared to loans with longer maturities.
Investments into loans with proven income of the borrower
The most common strategy is a reasonable loan amount ratio to a risk reducing proof of income of the borrower. An indisputable advantage is the possibility to look into the debtor’s bank account statements for the last 3 months from the submission of the loan application. The investor will thus gain an overview not only of all the debtor’s income, but also of his expenses, living costs and style and last but not least, loans drawn and repaid to other mostly non-banking companies. Turnover in the debtor’s bank account can also be an important indicator.
Investment in high yield loans
The reason for choosing this investment strategy is clear, namely to maximize the return for the investor. Investors here focus on high-percentage loans to borrowers who are in a hurry to borrow or for whom it has often not been possible to examine their income and expenses in the form of bank statements. The purpose of investing in P2P loans is, of course, to make as much money as possible, but at the cost of investing in riskier loans.
Investments in loans secured by real estate
This is one of the safest strategies an investor can choose. This strategy assumes investments only in loans secured by a lien on residential real estate, most often owned by the borrower. We have set the parameters for these types of loans so that we offer investments in individual loans upwards from 50.000 CZK and also with a lower interest rate from 5% to 25% per year. Unfortunately, there is also a low number of borrowers who are willing to pledge real estate.
Investing in loans with guarantors
An additional strategy can also be investing in loans, where there is a guarantor in addition to the borrower. In the event of non-payment of the loan, this guarantor is sued and, if necessary, his property seized under execution alongside with the debtor’s. Thus, a similar loan becomes more attractive and significantly safer for the investor, because it is possible to heal on two different people. The disadvantage is usually the lower yield of this loan and also the fact that we do not offer such loans as much as we would like, due to the fact that borrowers must necessarily engage other people in the loan.