Peer-to-peer lending sites: MSE guide discussion

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Comments

  • Froggitt
    Froggitt Posts: 5,904 Forumite
    The thing I hate about Ratesetter is when a loan is redeemed early, eg one priced at say 6.2% on the five year market, and when it comes to re-investment, you take pot luck with the going rate, currently less than 4%.

    Surely they should protect your original rate in some way....eg presumably the redeemeer has had to pay a penalty for early redemption, or has paid well over the 6.2% for the life of the loan.
    illegitimi non carborundum
  • bigadaj
    bigadaj Posts: 11,531 Forumite
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    Froggitt wrote: »
    The thing I hate about Ratesetter is when a loan is redeemed early, eg one priced at say 6.2% on the five year market, and when it comes to re-investment, you take pot luck with the going rate, currently less than 4%.

    Surely they should protect your original rate in some way....eg presumably the redeemeer has had to pay a penalty for early redemption, or has paid well over the 6.2% for the life of the loan.

    But that would reduce their profits.
  • Froggitt
    Froggitt Posts: 5,904 Forumite
    Their profits would be the same as if the 6.2% loan hadnt been redeemed.

    This way, they will reduce their investors.

    I've put my money into a 5 year contract at 6.2%. I expect that rate to be honoured.
    illegitimi non carborundum
  • elephantrosie
    elephantrosie Posts: 467 Forumite
    any other platforms to recommend? i need to diversify my investments in p2p
    Another night of thankfulness.
  • TheShape
    TheShape Posts: 1,779 Forumite
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    Froggitt wrote: »
    Their profits would be the same as if the 6.2% loan hadnt been redeemed.

    This way, they will reduce their investors.

    I've put my money into a 5 year contract at 6.2%. I expect that rate to be honoured.

    I'm not using Ratesetter (not likely to at the rates they are offering) but isn't early repayment risk just another risk you take with p2p. My understanding from a brief look at the Ratesetter site is that there are no penalties for the borrower for early repayment so as a lender you simply receive your capital back and reinvest it as you see fit. It's not the same as a five year fixed deposit account with your bank.
  • fun4everyone
    fun4everyone Posts: 2,339 Forumite
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    TheShape wrote: »
    I'm not using Ratesetter (not likely to at the rates they are offering) but isn't early repayment risk just another risk you take with p2p.

    I completely agree, but shouldn't Ratesetter be splitting up say one £2000 investment into many smaller loans "under the hood". That way if one gets repaid its only a partial amount. Seems like if you put a chunk into a market they just match it to one loan. I might be wrong of course.
  • TheShape
    TheShape Posts: 1,779 Forumite
    First Anniversary Name Dropper Combo Breaker First Post
    fun4everyone wrote: »
    I completely agree, but shouldn't Ratesetter be splitting up say one £2000 investment into many smaller loans "under the hood". That way if one gets repaid its only a partial amount. Seems like if you put a chunk into a market they just match it to one loan. I might be wrong of course.

    It would be preferable to have your investment divided between a decent/large number of loan parts. I'm not sure how Ratesetter handles that.
  • londonlydia
    londonlydia Posts: 428 Forumite
    First Post First Anniversary Combo Breaker
    I'm using Crowd2Fund which I quite like. It's got a clean app that I use whilst on the go, and the key info is supplemented by good general information. Mostly, I've liked the diversity of the businesses to invest in - I've got a mix of Spanish slate mining, fireplaces, and Christmas gifts investments at present!
  • jamesd
    jamesd Posts: 26,103 Forumite
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    edited 29 May 2017 at 3:04PM
    elephantrosie wrote: »
    i see not many people are into P2P. ... there are only 2000 investors that uses ablrate.
    That's an old number, there were at least 3,000 by April 2017 based on the borrower ID numbers in secondary market deal contracts. Your own borrower ID number at the top right of the screen will tell you how many joined before you but don't say what that number is. Since Ablrate started £21 million of lending has been done.

    The oldest P2P lender, Zopa, says that since 2005 £2.3 billion was lent by their 76,000 lenders.

    To put that into context, 12,900 people used Venture Capital Trust investments in the 2014-15 tax year, 44% invested no more than £10,000 and the total invested was £402 million.
  • badger09
    badger09 Posts: 11,205 Forumite
    First Post First Anniversary Name Dropper
    jamesd wrote: »
    That's an old number, there were at least 3,000 by April 2017 based on the borrower ID numbers in secondary market deal contracts. Your own borrower ID number at the top right of the screen will tell you how many joined before you but don't say what that number is. Since Ablrate started £21 million of lending has been done.

    The oldest P2P lender, Zopa, says that since 2005 £2.3 billion was lent by their 76,000 lenders.

    To put that into context, 12,900 people used Venture Capital Trust investments in the 2014-15 tax year, 44% invested no more than £10,000 and the total invested was £402 million.

    I wonder how many of those 76,000 lenders are still active though. I suspect that many 'early adopters' like me, are no longer actively lending through Zopa;)
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