What ways to earn by borrowing money are there?

The history of the loans has changed over the years, originally banks or financial companies only approved loans to those who had someone who accredited it who should also enjoy the trust of the entity.

Today the lending trend, like many aspects of life today, is influenced by technological advances, in this sense, the internet, websites and social networks, are the bread of each day.

As to credits, There are currently many websites that work under the modality of community loans, the idea is that if someone needs and applies for a loan, the community can help them and both sides win.

Formula win - win

Generally the basic idea is that both sides win, the borrower seeks to obtain a rate that Normally the bank cannot give you and the lender in addition to helping another obtains a profit for your money.

Those who become part of the community on the site act as lenders, the site manages and deals with the aspects of origin of the loans, this includes the collection of the money and the management of the payments, taking a percentage for its service.

When making a contribution, the minimum rate that is expected to be received for the use of the money is specified. Once the loan is financed, the rate may go down depending on the community's relationship. For security the borrower is evaluated and the time of the loans and the rate varies depending on said evaluation.

These loans between individuals have become a new way to finance, invest and make a profit.

P2P or Crowdlending loans

Also known as crowdlending loans, represent an investment possibility or in the other case are easy access to credit. Therefore, they are considered an alternative source of financing and an attractive way to invest and achieve profitability.

They are loans granted through the use of web platforms, which put users in contact who require financing (borrowers) with investors (lenders) who intend to achieve the profitability of their savings by doing we pay with the same.

To get the idea clear crowdlending in Mexico, we clarify crowd is equal to "crowd" and "lending" is to lend. These platforms obtain the capital of different investors, each one contributes one until reaching the total requested in loan.

Advantage

• It is an innovative model, it allows obtaining financing without going to any bank, on the other hand, it represents an asset to investors that allows them a certain profitability.
• The interests for the investor are more attractive than those offered by a bank when placing the money in a fixed-term deposit, life insurance, etc.
• By increasing the level of diversification, risks are reduced to a minimum, the investor can achieve a return of almost 8%.

The investor does not have to face commission or entry cost.

Small investments can be made in various projects in a smart way.

• It has been successful around the world, so money can be loaned to companies or individuals in the same country or abroad.
• Obviously they include risks, but there are techniques such as diversification and reinvestment that allow these risks to be minimized.

Disadvantages

• Loans to individuals involve risks, in terms of assessing the financial profile of the person.
• Loans to companies include the risk of losing the investment or part of it, if the company files for bankruptcy.
• The money is only recovered after the term of the loan. It is not like a good or a stock that can be sold if needed.
• Past performance of the CrowdFunding platform is not a guarantee of future performance.
• There are many platforms, you need to be careful when choosing.