P2P Products Are Hidden Risks. Investors Need To Be Cautious.

For P2P products with high yield and liquidity, investors need to notice that liquidity is achieved through the pfer of the two level market of the platform itself, or the direct redemption of creditor's rights through platform, which is a key factor related to the vital interests of investors.

Recently, some netizens praised the "P2P financial account for their use" when they invested in the P2P investment last year. They believed that they had two advantages of high yield and liquidity, while ensuring a certain level of return, and meeting the needs of investors' liquidity.

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The so-called "P2P financial account for use" refers to such P2P products: one is the product of increasing returns with the extension of investment duration.

After user investment, the investment period is not limited, and the principal can be extracted at a certain time and the agreed income can be obtained.

For example, the first month (or quarterly) can get an annual yield of 6%, and a second annual (or quarterly) yield of 6.5%.

And so on.

Another kind and

Similar products, a rate of return, a user can withdraw the principal at any time and get the corresponding yield.

Although the investment rules of the product are similar to that of the balance treasure, its annual yield is much higher than that of the balance treasure, which can reach more than ten percent.

Since 2014, the scale of the "P2P" platform has expanded very fiercely.

Only a few months online, monthly trading volume reached tens of millions of yuan, and quickly won the favor of venture capital.

However, is the mode "perfect" like those of the netizens?

The balance of treasure products is linked to money market funds, allowing users to withdraw cash at any time, because money market funds usually buy a very low risk and highly mobile investment. Fund managers will set aside a certain cash position every day to meet the needs of users at any time.

P2P assets, whether they are small or micro business loans or consumer loans, are far more risky than money market fund assets, and P2P claims must have a fixed time limit.

However, when the user can withdraw cash at any time and P2P loan has not yet expired, the cash withdrawals can only come from the "P2P" "money" - that is, the platform to find money to meet the demand for withdrawals, and to be repaid after the borrower pays the repayment.

There is no doubt that under this mode, investors and investment targets no longer correspond to each other, the only way is capital pool.

For investors, the biggest risk of the pool mode is two aspects: first, the platform may arbitrarily divert funds and enhance the motivation of "running away"; two, this opaque mode of operation provides a cover for "borrowing new and returning to old".

Even if the platform has bad debts or tight cash flow, it can still compensate the new users' funds.

It evolved into a drum game.