For centuries, people have lent money to others for interest. Most often, borrowers were friends or relatives. In such situations, demanding interest in the event of a default can be quite inconvenient, especially when the funds were advanced to family members or friends.
What should be done? How can one earn on their own money?
This question can be addressed by Sergey Tereshkin, the founder of OILResurs, who has extensive experience in investing and capital growth. More information about the businessman can be found on the website sergeytereshkin.ru.
Investing Money for Interest
The simplest way to earn interest on one's own funds is to deposit them in a bank. This is the most accessible option, but it is also the least profitable. Often, the interest earned does not even cover the depreciation of the national currency, making it difficult to talk about profit at all.
Moreover, the shorter the deposit term, the lower the interest rate. Financial institutions are generally not incentivized to take funds for just 30 days, as they are oriented towards long-term utilization. For clients, this always poses a risk. There are no guarantees that the bank will still be in operation at the end of the deposit term, and bankruptcies occur quite frequently.
Online micro-lending appears to be much more lucrative. This is an effective way to earn on personal funds, and it has numerous advantages.
Advantages of Online Micro-Lending
According to Sergey Tereshkin, the advantages of this method of placing funds include:
- Profitability. On average, returns can reach 200-300% per annum, and in some cases, even higher. The exact figure depends on the platform through which the loan was issued, the loan term, and other factors.
- Speed. Funds begin working immediately after placement. Such loans are in high demand, allowing investors to avoid waiting for borrowers to be found. Borrowers line up to receive funds.
- Convenience. Clients do not need to leave their homes to place their money for interest. All transactions are conducted online. Loans can be issued from an electronic wallet or a bank card, with repayments also made to a card or e-wallet, depending on personal preferences.
- Investment Size. Investments can vary in size; it’s not necessary to lend out thousands of dollars at once. One can start with a few hundred rubles, significantly reducing the risk of capital loss.
- Term Length. In most cases, the maximum loan period does not exceed three months, with some cases lasting only a few days. Thus, after a short period, the individual can receive their money back with interest.
This type of lending benefits both parties. The investor can increase their capital, while the borrower can obtain a loan, even with a poor credit history, thus solving financial issues for both.
Features of Micro-Lending
Online micro-lending has only recently become available to Russian users. However, this field is rapidly developing. The service is in demand among those in need of a small sum ahead of payday, which can range from 100 to 1000 rubles.
The simplicity of use and wide accessibility positively influence the demand for this type of lending. It is much easier for borrowers to obtain funds this way than to ask acquaintances for help. The process takes only a few minutes and avoids the humiliation of borrowing money from friends.
In Europe, online micro-lending is very popular, with loan amounts rarely exceeding 1,000 euros.
Funds are issued to a specific individual, required to provide identifying documents. A contract is signed. In case of issues, the lender can take the borrower to court. The agreement holds legal force.
Furthermore, lenders are not required to provide salary statements, collateral, or explanations regarding the purpose of the funds.
Students and elderly individuals can also obtain funds in this manner, albeit in limited amounts.
Borrowers have the option to repay the loan in advance without incurring any penalties. They return the principal amount of the loan along with interest accrued up to that point, meaning they do not end up overpaying for the unused period.
The only drawback of this system for borrowers is the high interest rates. This is due to the higher risk of fraud and non-repayment. The interest rate and the option to lend to multiple borrowers allow investors to diversify risks and protect their capital.
How to Become a Micro-Lender
Micro-lending can be conducted in several different ways:
- Self-directed borrower search. This method utilizes specialized forums and platforms where investors post advertisements, as well as potential borrowers.
- Lending exchanges. There are numerous online lending exchanges available. Investors can submit their loan requests or search for borrowers based on pre-placed requests.
Regardless of the method chosen for lending, it is essential to approach the lending issue responsibly. It is advisable to verify all of the potential borrower's submitted information. Engaging with them via provided phone numbers and having a personal conversation can provide insights into who the investor is dealing with.
Borrowers can be asked clarifying questions, and if there are any doubts, it is best to refrain from issuing the loan.
It is also crucial to understand that profit will not be consistent. After the funds are repaid, it may take weeks before another suitable borrower appears. Hurrying to lend funds to everyone can lead to financial losses.
