Robocash described three strategies that lenders can use to increase their profitability when investing in the platform.
The European peer-to-peer lending platform highlighted the strategy of reinvestment and capitalization of interest, which means investing continuously.
Read more: Robo.cash customers rank investment higher among spending priorities
Robocash said that if a lender invests in short-term loans for seven days on the platform and reinvests their interest every week, their profitability at the end of the year can reach 10.95%, or 0.45 points. percentage (pp) more than it would be if they had only invested the principal while maintaining high liquidity.
The platform said that lenders could continue to reinvest in long-term loans to earn more, for example by investing in a loan for a year and then investing in similar loans. This would generate a return of up to 12.68 percent for a year, 0.68 pp more than the annual interest rate.
Robocash cited the loyalty strategy as another means by which investors can generate more returns.
The platform has a loyalty program that can increase the annual return by up to one percent, depending on the amount of money invested.
The lender receives 0.3, 0.5, 0.7 and one percent of the base rate when the total balance of the investor’s portfolio reaches € 5,000 (£ 4,277), € 10,000, € 15,000 respectively. and € 25,000.
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When this method is combined with the interest capitalization method, the annual return could go from 12.3% to 14.1%.
The other tactic that Robocash highlighted was the gradual investment strategy, which means replenishing the investment portfolio, for example, adding more funds each month.
In addition to having more to invest, this gives lenders the opportunity to gradually reach a new level in the loyalty program, which increases the interest rate.
Read more: Robocash financed 8.8 million euros in loans last month
“If you want to focus on increasing profitability, you can reinvest funds and capitalize income, qualify to participate in the loyalty program or replenish your balance on a monthly basis, which will increase the total amount you invest. “Robocash said in a blog post. on its website.
“It should be noted that the recommendations on strategies that Robocash gives are informative in nature. They are prepared without taking into account the investment objectives, risk tolerance or financial situation of each particular investor and may not be suitable for all investors.