Grupeer announced that today they will launch a new type of loan for investment! They will introduce amortizing loans by their trusted loan originator SIA Monify. One of Grupeer’s core competencies is diversification tools: geographical, loan type (real estate or business loans), and now loan repayment schedule.
How does it work?
Currently, the principal is returned back to the investor when the maturity date comes, and interest is calculated based on the total loan amount. The key difference of new amortizing loans is that principal repayment will take place over the loan period and interest is calculated from residual loan amount (total loan amount less principal repayments according to schedule).
Why is it good for investors?
’s investors will be able to diversify held investment portfolio and considerably reduce credit risk. Credit risk is associated with the failure to return the principal at maturity. All Grupeer loans are protected by BuyBack guarantee- when loan originator is obliged to pay the principal and interest rate in case borrower defaults. However, there is still unlikely scenario that loan originator fails. In that case, Grupeer will facilitate the investment return by hiring a lawyer, who will represent the interest of all investors. However, this will take time and will cause inconvenience. So, with amortization loans, this risk is reduced.
The second benefit is a sooner availability of investment principal, which can be used for reinvestment. Setting up Auto-Invest function will automatically invest all money monthly received and will even further increase the return, as your money (which were sitting in the body of the loan) will be earning in the new project.
Please note, that because amortizing loans are a new product on the platform, auto-invest strategy can’t filter yet the amortizing loans vs. non-amortizing. So, if you do not wish your funds to be invested in the new type of loan, please disable the auto-invest temporarily.