6 Reasons Why A Pandemic Is A Great Time to Invest in P2P Loans

You’re looking for places to put your money that will actually make a decent return on your investment.

You’re wanting to diversify your portfolio and minimise risk.

You’re interested in getting started with P2P investing.

But now you wonder: is it a good idea to invest in loans in the middle of a worldwide pandemic and economic recession?

Good question!

The short answer: yes. In this post, we give you 6 reasons why.

1.   Earn real interest!

One of the main reasons peer to peer investing is a good first investment is because your return on investment is a lot higher than with other asset classes. Due to the recession and current pandemic, bank interest rates on savings accounts are incredibly low, with some countries even introducing negative interests such as in Japan and Sweden.

This means that the money sitting in your savings account isn’t doing much for you – in fact, you’re actually losing money over time due to inflation!

Even in the middle of a recession, we still need to be able to save money for retirement, kids and a home. Where is somewhere you can put your money that will genuinely help you grow your savings and actually reach those financial goals?

If savings accounts don’t offer enough interest, the stock market is still volatile and real estate is too complex and time-intensive, what else is there?

Peer to peer investing!

P2P investing is a good investment alternative that allows you to grow your savings in a more predictable and consistent way, with interest rates of as much as 14% (or 16% with our loyalty bonus). Finally somewhere where you can earn real interest!

2.   Increase in demand for consumer loans

The pandemic has negatively impacted millions of individuals and small businesses, with many seeking outside help to get through these tough times. Although European governments have been issuing low-interest loans and support packages, this support has been targeted mainly towards small businesses.

That’s great news for businesses, which have opted to take on these attractive government loans rather than going through alternative lenders or banks. Having said that, the government is not offering such attractive loans to individuals.

This has produced a large unmet need for individuals who still need loans, but aren’t getting the attractive rates that businesses are getting. They are therefore seeking help from alternative lenders such as Wandoo Finance, our loan originator. The increase in consumer loans means that P2P platforms that invest in consumer loans, such as Swaper, are able to offer more loans to investors – and more loans to invest in means a higher return on your investments.

3.   Transparent and convenient

Many P2P platforms provide regular updates to their investors (including us) and publish annual reports and financial statements. This means that often P2P platforms are more transparent than other companies, banks or financial institutions. During a time of great uncertainty such as a pandemic, this can give great peace of mind to you, the investor.

Not only that, but investing in P2P loans is often a lot easier and more straightforward than investing in the stock market or other alternative investments. With a P2P platform, you just need to provide and verify identity documents, create an account and transfer the funds.

You can set up Auto-Invest Portfolio and never have to learn about the ins and outs of investing, keeping track of P/E ratios or even the news – it’s all on autopilot. If you’re busy handling the impact of the largest crisis we’ve seen in a century, you may prefer an asset class that doesn’t require being managed every day.

P2P platforms such as Swaper use more modern technologies than many other brokerages and financial services companies, which is why we were able to easily start working from home, upgrade our systems and adapt to the new normal.

4.   Good diversification

During periods of uncertainty, you want to be reducing your investment risk as much as possible and cushioning the blow of possible financial crashes. One of the best ways to decrease risk is to diversify your investments.

P2P investing offers a great way to diversify your investment portfolio, minimise risk and maximise your returns.

P2P loans are a different asset class to stock market investing, angel investing, bonds, options and real estate. By setting aside some of your wealth into P2P investing, you are exposing yourself to another section of the market – this helps cushion the blow from stock market crashes (hopefully there’s not another one!), recessions and collapse of an industry.

5.   More liquid than other investments

P2P investing is not the most liquid asset class – it can take more than 30 days for loan terms to complete and even longer if a borrower pays late. Having said that, liquidity mostly depends on the P2P investing platform that you’re using.

For example, with Swaper you can sell your loans on the secondary market and get your investments liquidated usually quite fast or within 30 days. Other platforms may take a lot longer, depending on the type of loans they are investing in and whether selling on the secondary market is an option.

All in all, P2P investing is more liquid than real estate lending or angel investing, for example. You do get your money back relatively quickly along with interest. This makes it an attractive investment if you don’t want to tie up your money into liquid assets during an unpredictable time such as a recession or an unexpected event such as a pandemic.

6.   The second best time is now

You’ve likely heard the popular Chinese proverb:

“The best time to plant a tree is twenty years ago. The second best time is now.”

This mentality also applies to investing. When it comes to investing in P2P loans, the sooner you start the better. That’s because compound interest accumulates exponentially, and “time in the market” beats “timing the market”. The longer you let your investments accumulate over time, the larger your wealth grows.

(And with a 14% return, it grows very quickly).

The first few years, those returns may not seem like much. But 20 years down the road, you can be adding thousands to your portfolio without even having to contribute extra funds.

Pandemic or not: the sooner you invest, the better.

Start investing now, and the money will have more time to grow exponentially. Although you won’t be able to spend it immediately, this is money you’ll be able to use to retire early, give your kids a good education and live a long and fulfilling life.


A pandemic means there is an increase in borrowing and uncertainty.

The increase in borrowing means there are more investment opportunities for you as an investor. The increase in uncertainty means that you prefer putting your money in relatively liquid assets that are predictable, offer high returns and are diversified from other asset classes.

All this means that a pandemic is a great time to invest in P2P loans!

Luckily, we’ve made it easy for you to get started with Swaper – whether you create an account on our website or invest in our loan app.