Retirement Income

Invest in Aussie dreams while you earn a regular investment income

Aug 22, 2022
Generating a passive retirement income to fund your plans may be easier than you think. Image source: Getty

With inflation on the rise and the stock market growing increasingly volatile, it can be hard to find a short-to-medium-term investment that offers a balance between risk and reward. After all, you might not want to have to wait 10+ years for returns on the stock market, but your hard-earned dollars could be earning a return much sooner to help you fund your retirement plans.

Peer-to-peer lending with Plenti can provide a fixed-income investment so you can avoid the unpredictability of the stock market and access strong, stable returns.

What is peer-to-peer lending?

Put simply, peer-to-peer lending means you lend your money to those who want to borrow it. They pay you back the initial amount borrowed plus interest. This interest forms the returns you earn.

Plenti’s peer-to-peer lending platform automatically matches borrowers and investors – it’s like an online marketplace, but for money. The platform’s technology has allowed Plenti to fund nearly $1 billion in loans by matching investors’ funds with borrowers.

Plenti undertakes strict credit checks on anyone who applies for a loan. They’re the same types of checks a traditional lender would make, and they look at the same things including credit history, credit score, income, and employment status. So you can have peace of mind and confidence in the borrowers you’re lending to.

The most up-to-date data about the creditworthiness of Plenti’s borrowers is displayed in its investor portal. However, a quick overview shows the average age of Plenti’s borrowers is 44, and 68% are homeowners – that’s a similar borrower profile to a bank. Additionally, the average income of borrowers is over $75,000, while the average loan size is only $15,000.

It’s a win-win for all parties

By investing through the Plenti peer-to-peer lending platform, not only will you be helping fellow Aussies fund their ambitions, whether it’s installing solar panels, renovating their house, or purchasing a new car, but you are also making your hard-earned money work harder for you, leaving you with more in the bank to spend on yourself. It’s a win-win situation for everyone.

Because these loans are for everyday purchases that consumers will always need, peer-to-peer lending is a dependable way to diversify your portfolio and access competitive rates when other investments, like shares, may be unpredictable in the short term.

Plenti protects its investors and their investments with its lending platform’s loss provision model. Borrowers are charged a fee based on their risk profile, and the fees are pooled together to create the Provision Fund. In the event a borrower misses a repayment or defaults on their loan, the Provision Fund can step in to protect you as an investor.

In fact, Plenti’s Provision Fund has a 100 per cent track record of protecting investors and currently sits at more than 200 per cent of the value of the expected future losses on loans outstanding. However, Provision Fund coverage is not a guarantee and, like with many investments, there is always a risk.

Flexibility to suit your needs

One of the many reasons investors choose the Plenti lending platform is because of its flexibility.

There are a range of investment terms including 1-month rolling, 3 year and 5 year income markets. You can also get started with as little as $10 and there’s no need to regularly add to your investment monthly in order to get the best rate. In fact, automatic reinvestments enable Plenti’s technology to do the work of reinvesting your capital and interest repayments for you.

The key benefits of peer-to-peer lending with Plenti

1. Regular source of fixed income

As a fixed-income asset, peer-to-peer lending can build diversity and stability into an investment portfolio and can help make the most of your investing dollars.

2. Attractive, stable returns

Consumer loans have a solid track record of providing investors with attractive risk-adjusted returns. Since its inception 8 years ago, investors using the Plenti lending platform have earnt over $84 million in interest.

3. Simple, digital experience

Plenti’s user-friendly investor portal makes it easy to transfer in funds and manage your investments. There is also a customer support team available via phone and email if you ever need a hand.

4. Regulated

Australian peer-to-peer lending platforms, including Plenti, provide investors with access to loans via a registered managed investment scheme. ASIC regulates these operators by requiring them to hold an Australian Financial Services licence, which entails regular audits, maintaining a comprehensive compliance regime, publishing various reports and information (such as a Product Disclosure Statement) to investors so that they can make informed choices, and ensuring that advertising is neither misleading nor deceptive.

This means peer-to-peer lending is regulated to the same standard as any other managed investment fund that you might place your funds with.

What are the risks?

No investment is without risk, so we’ve compiled a brief overview of the risks associated with peer-to-peer lending with Plenti. This is not an exhaustive list, and you can read more about the risks here.

  • No deposit guarantee: peer-to-peer lenders are not authorised deposit-taking institutions (ADIs), and therefore, your investment doesn’t have the benefit of deposit protection.
  • Borrower late payment or default: As your money is being lent to borrowers, if a borrower misses or stops payment, your investment may be affected. In this situation, Plenti’s Provision Fund can help protect your investment. If your investment cannot be covered by the Fund, you may only be able to withdraw your funds when the loan has been collected.
  • No interest on funds not on loan: You do not earn any interest on funds in your holding account or funds which are on market waiting to be matched to a borrower. If there is a delay in matching your funds to a borrower (for example, where you choose to lend at a rate higher than the prevailing rate in a lending market, or there is lower borrower demand), you will not receive any interest.
  • Limited ability to withdraw funds until the end of lending market indicative term: You may be able to request early access to your investment, as long as we are able to replace your funds with those of another investor. You can read more about the early access feature in the PDS

If this sounds like the right investment option for you, you can get started in 5 easy steps:

1. Register: Provide some basic info including personal details and bank details

2. Transfer your funds in: The minimum investment is just $10

3. Select a lending market: Choose from five options

4. Place a lending order: Select a market rate or a custom rate

5. Set and confirm your investment preferences: Once your funds have been matched to a borrower, you can hit the open road, plan your retirement or just sit back and relax while your investment continues to grow.

This information has been prepared as general information only without consideration for your particular investment objectives, financial circumstances or needs and should not be taken as financial product advice. You should read the Product Disclosure Statement and TMD available on Plenti’s website before making any investment decision. Plenti RE Limited ABN 57 166 646 635 holds Australian Financial Services Licence 449176 and Australian Credit Licence 449176 *The "Earn up to" rate represents the interest rate limit for the 5 year income market. Rates are not set by Plenti and are subject to the supply and demand of borrower and investor funds in each market and may be lower. Lender rates may assume payments received are continually reinvested at the stated rate and assume your investment is protected by the Provision Fund in the event of any borrower late payment or default, however, there is no guarantee nor warranty as to any protection from the Provision Fund.

Ready to earn up to 7% p.a. returns?*

Start investing today with as little as $10, then sit back and watch the returns roll in.

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