Peer-to-peer lending sites: MSE guide discussion

If you've been wondering about Ablrate but haven't looked yet you might want to take a look at the new 14% loan for Portacabins at Pinewood Studios initially to be used for a Disney film. Amortising, so it repays just like a personal loan, some capital and interest each month. Four year loan with a secondary market you can sell on at no cost, actually usually at a small profit, if you want to get out sooner.

One interesting thing is that the 14% is paid income tax free by Ablrate from the time you bid until the loan is filled. It counts as a discount on the purchase price so it's tax free unless you will pay capital gains tax. Not that it's likely to take long to fill, it's at 45% offered in about half a day so far, a fair chunk from me. (Later: 75% offered in about a day now)

Remember to diversify across lots of loans and several platforms. There are around a dozen loans on the Ablrate secondary market at the moment at yields (AER) of nine to over fifteen percent. None of them looks unduly risky.

Ablrate is my favourite P2P platform. MoneyThing next and there are some decent 11% loans expected there soon.

Declaration of interest: I sometimes sell on the secondary market there so depending on what you buy, when and whether I happen to be selling you might end up buying off me.

Visit different p2p websites and see which one would be suitable as they operate very differently. Describing it all in a post replying to you would be impossible.

Haha I do not think anywhere in this world you could access the money quickly if the fund seemed in trouble.
Some p2p platforms advise to minimise the risk by lending no more than 1%of overall mobey there to a particular borrower , some keep physical item like jewelery on site as pawn shops do , some create "funds" which intended to repay you even if borrower defaults but there are no guarantees.

jenberry wrote: »

Thank you. I guess what I'm trying to determine is if there is a way to minimise the risk associated with P2P lending, i.e. are there any where I could receive a reasonable interest rate (3-4%) but access my money fairly quickly if the fund seemed to be in trouble.

A low risk option would be to try RateSetter rolling, I'm getting 3.9 % at the moment but it's normally nearer 3.0 %. Your money is locked in for 30 days at a time but you can stop the next 30 days starting at any time. Not quite instant access but not far off.

They have an offer of £100 bonus if you keep £1k in for 12 months so for the first year it's more like 13-14% return, if you have a friend who already uses ratesetter they can give you a referral code which gets you the £100 and them £50 but you can also get the £100 offer from the RS site. This is a no brainer for the £1k.

Higher risk options such as ABLrate, SavingStream etc can give you more like 10-12% but you have to manage individual loans so it's a lot more work and might not be worth it for £1k. BondMason diversies the loans for you and targets 8% so I'd consider putting the £500pm with them if you're happy to take a bit more risk. You could start with less and try it out for a few months.
R

Bondmason minimum opening investment is £1000, target is 7% and it may change(read drop further )as p2p rates change.