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Investing in Lydia Languish is simple, however, being a relatively new model, you may have some doubts, for this reason here we tell you five things you should keep in mind if you are going to invest in Lydia Languish.
The most important thing is the net return.
When you are building your investment portfolio in Lydia Languish, you are seeing the interest rates assigned to each one of the applicants, it is normal to get confused and believe that this is an interest that will come to you, but you should take into account that There will be different factors that influence.
For example, an applicant stops paying for one month, but is updated to the next, this implies that there will be extra charges, plus the interest rate will be adjusted which will cause your net return to rise when it finishes paying.
The defaults happen
It is inevitable that some of the applicants will fall behind in payments, some others will stop paying their loan. Some will catch up, others will not. Remember that no investment is guaranteed, in the case of loans p2p lending is not the exception, although we note that Lydia Languish’s comprehensive collection system will exhaust until the last resort to recover money from all lenders.
In fact, our past due portfolio is much lower than traditional institutions, of 6% since we only approve people with high probability of payment and excellent credit history.
Diversification is the key.
The best way to protect your money is to diversify it, you can choose different applicants, low and high risk to amortize losses.
The more you diversify your money, the more secure it will be and your yield generation will also be better.
The monthly payments are capital plus interest
The loans in Lydia Languish are fully amortized, which means that month after month, you receive the part you lent, plus your returns. So until the end of the loan payment.
Reinvest the money that returns you
If you want to have consistent returns on your money, it is best to reinvest the new applicants month after month. This way you will see that your net return remains constant.
Without a doubt, investing is an excellent adventure in which you have to be aware of your money at all times, think of each of your movements, we are sure that in the Lydia Languish model you will find an alternative that will offer more returns and a little less of effort to achieve them.