One of the most common options for people who have a certain capital is to become private lenders, with the objective of obtaining a return for the money they have lent .
If you want to know how to be a good successful lender, the first thing you must do is to conduct your operations in compliance with the established regulations and to be sure of how to be a legal lender, you must know that each of the loans must be documented, taxed and earned. minimum interest rate (regulated by Law) since it is evident that 0% can not be lent.
But there is good news, you can also become a successful investor and get a high return for your money, registering as an investor in MytripleA and start lending your money to companies in our country. But let’s go in parts. We’ll explain it later.
How to be a lender in Spain?
You can be a money lender in Spain, whether individuals or freelancers or even companies, but to know how to be one of the best you have to take into account that it is not enough to want to lend money, but it is necessary to register for that purpose.
So, how can I be a private lender?
There are several ways to be a money lender, in this case we will talk about the two forms of how to be a private lender that are currently most used in Spain.
Registering as a lender
On the one hand, there is a register in which any person who wants to dedicate themselves professionally to lend their money and monetize the savings must register as a lender and comply with the existing regulation in order to protect consumers who access this service.
Through crowdlending platforms
Another option of how to be a good money lender is to do it through crowdlending platforms, which is an alternative financing and investment still new in our country but that is experiencing a significant increase in recent years since it also does not require registration in any registration, simply a necessary to register as an investor in the crowdlending platform. In the case of MytripleA, you can do it in the section Invest your Money.
Crowdlending is the method through which companies or freelancers get loans funded by private investors who lend their money in exchange for a return. All this is mediated through crowdlending platforms. Learn more about crowdlending here.
How to be a money lender through crowdlending platforms?
To become a lender or investor in crowdlending platforms you have to follow an easy and simple registration process.
Crowdlending platforms have an assistant who will guide you through all the steps you must take to become an investor in the platform. Starting with a simple assistant.
- You just have to follow the steps that the assistant tells you to complete the registration . You should answer the simple questions that, in compliance with the law, we must ask you.
- Provides the necessary documentation : In the case of MytripleA, we request a photocopy of the DNI and photocopy of a bank receipt to be able to associate with your bank account. A bank receipt can be any document from the bank where you put the full account number and your name. The funds that you withdraw from your MytripleA account will be destined to this current account.
Once these steps are completed, you are already a lender in the platform and you can start lending your money choosing by yourself which company you want to lend to in the Market section.
I want to start lending my money to companies
5 tips to be successful when it comes to being a lender by crowdlending
Study all the companies and projects published
Study the applications of the companies in which you can invest before deciding on a specific project. Analyze the following fields:
- Compare the returns
- The minimum amount to invest (in the case of MytripleA is only € 50)
- The term of the loan
- The method of return
- The associated risk or the guarantees that it provides
- …
And so you can choose the loans or investments that interest you most.
Invest in platforms with risk assessment
It is important that you consider ahead the platforms that study the risk of each of the operations that are going to publish, since that gives you the assurance that the probability of a default occurs is less. MytripleA is the only crowdlending platform that offers investors transactions guaranteed by a Reciprocal Guarantee Company , being the operations that customers compare with a bank deposit. Learn more about these guaranteed transactions here.
The rest of the crowdlending operations offer a risk rating rating that will allow you to know the risk of each of the projects.
Diversify your investment portfolio
In the case of operations with a rating (they do not have the guarantee of a Reciprocal Guarantee Company), it is advisable to invest small amounts in different projects , since this way you will be able to diversify the risk of possible losses by being able to compensate the losses in case of produce with projects in which a good profitability has been obtained. You can diversify in terms of different criteria:
Regarding the risk
You can invest from an A + rating (lower risk and lower profitability) to an F rating (minimum rating that companies must obtain in order to make their financing available to investors). These operations usually have personal endorsement from the partners of the company and can go up to a 10% annual return. In this type of operations, diversification is more important.
In terms of profitability
It can also be diversified in terms of profitability : According to the rating and risk, profitability is, as is known, at lower risk, lower profitability, and greater risk, greater profitability. As I mentioned before, MytripleA is the only crowdlending platform that offers its investors the investments guaranteed by Reciprocal Guarantee Companies. Through these operations a 2% + guaranteed Euribor return will be obtained. Being a guaranteed investment, diversification is not necessary to obtain higher credit quality levels.
The Bank of Spain Circular 4/2016 qualifies the operations insured by Reciprocal Guarantee Companies, as “No appreciable risk” operations, placing them in the same category as operations with central banks or the deposit guarantee fund.
Diversification in terms of time
Diversification in terms of time is also interesting. We give you an example. If you invest € 6,000 in a 1-year loan with 8% annual return and another € 6,000 in a 2-year loan with the same profitability, do you know which will give you more profitability at the end of year 1? The 1-year investment will give you a return of € 263.18 and the 2-year investment will give you a return of € 375.89 in year 1
If you choose different terms and returns in the projects in which you will invest your money you can also diversify the risk of expected loss by decreasing it considerably.
Reinvest the amounts that you are recovering
In investments through crowdlending, the payment method is usually through monthly installments, although you will also find transactions with payment at maturity. It is highly recommendable to reinvest those amounts that are recovered month by month in other operations that are available to invest at that moment and in this way the profitability obtained will be multiplied .
Keep in mind how the interest rate in crowdlending is calculated
Generally crowdlending platforms use a depreciation system by French method . This has the following characteristics:
- The monthly installments are of the same amount (In case of crowdlending they vary slightly due to interest retention)
- But at the beginning, more interest than capital is paid and as the loan progresses, it is equated to paying more capital than interest in the last installments.
- The interests that calculate on living capital, and here is the quit of the matter
All this entails the following, when treating a method of French amortization and therefore the interests are calculated on the living capital, it is necessary to take into account that the company is returning capital and interests in its monthly installments. But we know that this is a mess, that’s why we have developed an investment simulator where you can calculate the profitability that you would get by investing in any operation by crowdlending without having to take the calculator.