How do I use Funding Societies? What is the process like? Which product would you recommend? - Seedly
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Anonymous

Asked on 22 Feb 2020

How do I use Funding Societies? What is the process like? Which product would you recommend?

What are the pros and cons of using Funding Societies? Is it a worthwhile investment? What kinds of investors would benefit the most from their services?

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Tee Hon Eng
Tee Hon Eng
Level 4. Prodigy
Answered on 24 Feb 2020

You have to create an account, get yourself verified.

Once done, you will see available investment from time to time.

Deposit an amount that you are comfortable with.

P2P lending is a high risk investment.

You may choose to read every single factsheet for each opportunity then choose to invest.

Or generally I think most people like me just set an auto invest rule.

There is also a guarantee return investment option. Where it is guaranteed by funding societies, lower risk but lower returns as well. (About 4%)

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Alex Chua
Alex Chua, Freshmore (Engineering System Design) at SUTD
Level 6. Master
Answered on 26 Feb 2020

I will to the main question.

Worthwhile? This is defined by you based on risk level, your playing level (capital willing to invest) and the knowledge of the p2p business model.

So is it worth while to you?

Every investors can benefit from the platform as long as they have done their due diligence and are comfortable with the risk involved in p2p lending.

I will just give some advice on optimising p2p.

Autoinvest. This will guarantee yourself securing the loans. You can also set your comfort level and your amount per loans.

This will decide your loans portfolio and project your annual returns

I will recommend setting a limit to each borrower. Then be discipline to follow your rule. Most recommend putting not more than 2% of your capital per loans so that u can cushion the defaults.

E.g capital $1000. Avg annual interest :10%

Interest earn $100. If u put $20 per loan, u can forgo that possible 5 defaults. If u put $100 per loan, u can forgo 1 possible defaults.

To answer your last question, what kind of investors will benefit from the above service?

The most discipline one.

  • discipline to understand the p2p model

  • discipline in your risk methodology at p2p lending investment

  • discipline to understand and decide your loans

  • discipline to enquiring doubts on the loans

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