My personal experience using GoPeer, a peer-to-peer lending platform for Canadian investors.
So what exactly is GoPeer? GoPeer is Canada’s first consumer peer-to-peer lending platform for Canadians. They have been featured in the news here.
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What is Peer-To-Peer Lending?
Peer-to-Peer Lending is also known as Crowd-Lending or Alternative Lending. It is a unique way to earn credit card-type interest without putting up a lot of capital.
Normally, if you are looking to get a loan, you would have to apply for a line-of-credit through a bank or a credit card. However, peer-to-peer lending offers a unique alternative to traditional lenders.
How Is GoPeer Different from Lending Loop?
GoPeer offers consumer loans to individuals. And they allow unaccredited private investors (like myself or any Canadian) to invest in consumer loans. Lending Loop offers business loans to businesses. And they allow private investors to invest in business loans.
So GoPeer offers Canadians peer-to-peer lending on the consumer side, while Lending Loop offers alternative lending for the business side.
If you’re interested in learning more about Lending Loop, I have a detailed blog post about my experience with that platform.
How Much Can You Earn From GoPeer?
You can earn credit card type interest. Take a look at a screenshot from the marketplace and you can see how you can be earning between 11.7% and 25.4% interest on your money.
Is GoPeer Legit and Safe to Use?
GoPeer is a registered in all provinces and territories, and is headquartered in Toronto, ON.
GoPeer is not accredited by BBB, has been established for two years and does not have any reviews on the GoPeer BBB page.
They have 29 ratings on Google Reviews, with an average rating of 4.5 across all ratings. The negative reviews were mostly people complaingin that they got denied for a loan.
Yes, GoPeer is legit and safe to use. All investments can be risky, and because of the de-stabilizing nature of COVID, it would be prudent to only invest money you can afford to lose. I like the GoPeer model, however, because of how they vet their clients. You do need typically a 600+ credit score rating to be approved, and the credit score is shown in the marketplace as one criteria to evaluate which loans you will invest in.
Peer-to-peer lending is not correlated with the stock market, which makes this a good addition to any portfolio, in my opinion.
How does GoPeer Work?
GoPeer is a lending platform that allows you to invest in micro-loans to individuals. It is a peer-to-peer lending platforms that essentially is an intermediary between borrowers and private investors, allowing average folks to lend money directly to other individuals while earning a substantial return (interest rate) in exchange.
These P2P platforms leverage the power of the multitude to make capital available for businesses to operate and grow the economy. And for investors, they allow you to diversify into multiple loans, as low as $10 per loan, which reduces your overall risk.
How can I get a peer to peer loan?
You can apply to get a loan here from GoPeer using this link and get $30 back when you may your first payment. You should have a solid (600+) credit rating, as GoPeer has a proprietary method of evaluating who they will make loans to.
Reddit has become a source of due diligence these days, but there are not many reviews on Reddit about GoPeer.
Is P2P lending a good investment?
I like P2P lending because you can earn credit-card level interest rates of return. This is significantly higher than parking your money in bonds, money market accounts, or even a high-yield bank account.
One drawback of P2P lending is the time frame. You can’t liquidate your investment early, so you will have some money locked in for the duration of the loan. Most loans on GoPeer range from 3-4 years in length, during which your capital illiquid. I should point out that each month when the loan is repaid, you do get a bit of principle and interest back.
How much does it cost to start peer to peer lending
To fund your account you need to make an initial deposit of $1000. However, this seems to be more of a barrier-of-entry as you can withdraw most of it after creating your account. The minimum you can invest in any loan is $10. This low amount allows you to spread even a meager investment of $100 over 10 different loans, which reduces your overall risk.
Which Loans Should I Invest In?
That depends on your risk profile. Best practice is obviously to spread your money amongst the maximum amount of loans. I tend to favour loans that are C+ or better. Here is the criteria you will see that will allow you to make an informed decision about whether or not to invest in a particular loan.
I look at the credit score, the reason for the loan, the debt to income ratio, and the annual salary as a starting point.
Where can I get started with GoPeer?
You will earn $30 when you invest in your first loan as an investor, or when you make your first payment if you apply for a loan from GoPeer.
If you do have any questions, feel free to reach out in the comments or privately via my contact page.
Andrew Murray is an online marketer with a knack for explaining complicated marketing strategies that the average person can understand and implement. My mission is to help the little guy (or gal) make a full-time income from home!
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