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    • MoneyGeoff
    • By MoneyGeoff 5th Oct 17, 11:08 AM
    • 74Posts
    • 36Thanks
    MoneyGeoff
    P2P Lending
    • #1
    • 5th Oct 17, 11:08 AM
    P2P Lending 5th Oct 17 at 11:08 AM
    I have £100K which I'd like to invest in P2P. I already have pensions and ISAs containing funds, property and bonds but I'm a newcomer to P2P.

    I am looking to get 5% PA (after fees, before tax) from P2P over 10 years. I am prefering passive/autolend at the moment although I will have more free time for active investing soon. My limited experience so far is:

    Ratesetter - £10K - all lent. I love it, it's so fast and simple and I easliy got an average return over 6%. Will deposit a lot more here.

    Funding Circle - £4K - £1200 lent. I like the passive system but it is quite slow to lend. Happy to drip feed in as needed.

    Money Thing - £1K - all lent. All the available lending is with the same 3 borrowers so not inclined to deposit any more to this.

    Collateral - £2K - all lent. Similar to MT, although it does have more borrowers. Have invested £100 per loan. Unsure if I should deposit more.

    Zopa - £0. Would probably suit me but unfortunately not accepting new customers.

    Unbolted - £1K - zero lent. I like how the loans are very different to the other sites. Will drip feed in but doesn't look like much is going to get invested here.

    Assetz - £2K - £300 lent. Really like the site. It's very slow to lend though. Will drip feed in.

    Any advice welcome. In particular:

    1. Would it be stupid just to stick the lot in rate setter at 6%? It seems to be just what I'm looking for.

    2. Lending Works and Landbay seem to have autolend systems. Are they worth a try?

    3. Any tips on how to get more out of the active side? Given the small number of loans available I'm just allocating £100 to each so it's not really an active approach. Assetz seem to have hundreds of loans available on the manual side but nothing on the auto lend side. Should I move my Assetz money into manual as a way to get going with active?
    Last edited by MoneyGeoff; 05-10-2017 at 12:08 PM.
Page 1
    • george4064
    • By george4064 5th Oct 17, 11:57 AM
    • 844 Posts
    • 893 Thanks
    george4064
    • #2
    • 5th Oct 17, 11:57 AM
    • #2
    • 5th Oct 17, 11:57 AM
    Just thinking outside the box, you might want to consider P2P Global Investments plc (P2P)
    "If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett

    Save £12k in 2016 - #045 £10,358.81/£12,000 (86%)
    Save £12k in 2017 - #003 £9,136.98/£12,000 (76%)
    • Drp8713
    • By Drp8713 5th Oct 17, 11:59 AM
    • 746 Posts
    • 617 Thanks
    Drp8713
    • #3
    • 5th Oct 17, 11:59 AM
    • #3
    • 5th Oct 17, 11:59 AM
    Take a look at Ablrate, they offer an IFISA, up to 15% asset backed, and their secondary market means you should be able to get fully invested quickly.

    Some SM loans trade at a discount and others at a premium.
    • MoneyGeoff
    • By MoneyGeoff 5th Oct 17, 12:09 PM
    • 74 Posts
    • 36 Thanks
    MoneyGeoff
    • #4
    • 5th Oct 17, 12:09 PM
    • #4
    • 5th Oct 17, 12:09 PM
    Thanks, I'll look into those. Was meaning to try Ablrate, jamesd is a fan of it I think.
    • Flobberchops
    • By Flobberchops 5th Oct 17, 12:32 PM
    • 571 Posts
    • 399 Thanks
    Flobberchops
    • #5
    • 5th Oct 17, 12:32 PM
    • #5
    • 5th Oct 17, 12:32 PM
    As I'm sure you've discovered for yourself the best rates are with the active, manually invested loans.

    I would also recommend Ablrate as a decent companion to MoneyThing and Collateral. You mentioned you're already ISA'd up, but you may like to consider opening an IF ISA either this year if you have any subscription left, or next year. Ablrate for example does an IF ISA requiring a £2k minimum buy-in.

    I feel you may be being a bit harsh on poor old MoneyThing - it's a bit limited at the moment due to a few defaults all arriving at once (a bit like London buses) but normal service should be resumed soon and I've found it a well-managed platform with speedy transactions and good customer service.

    For a similar active platform, and for the sake of diversification, you may also like to consider Lendy. They do loans in the 7%-12% range and in my limited experience seem to be decent.

    If you fancy a bit of excitement and are willing to allocate a small percentage of your P2P cash to higher-risk, high yield platforms, perhaps consider something like Rebuilding Society. Loans of up to 20% available but naturally it's volatile.
    I work for a UK bank, but any comments made on this forum are solely my personal opinion. Caveat Emptor!
    • MoneyGeoff
    • By MoneyGeoff 5th Oct 17, 12:51 PM
    • 74 Posts
    • 36 Thanks
    MoneyGeoff
    • #6
    • 5th Oct 17, 12:51 PM
    • #6
    • 5th Oct 17, 12:51 PM
    Ablrate is great, I'm up and running already and £1K invested in no time. There are plenty of investments available, so it would be even better if you could autolend to each. Will do it manually for now.

    I have such a tiny amount of experience so I agree I could be harsh on MoneyThing and Collateral but Ablrate looks way better at this point in time. I'll check back on MoneyThing and Collateral periodically.

    When manually investing in the secondary markey do I need to be wary of the end date? The tiny amount of loans available on Money Thing all end next month. Do people deliberately sell loans towards the end? Is this when defaults are most likely?
    • AlanP
    • By AlanP 5th Oct 17, 1:38 PM
    • 935 Posts
    • 637 Thanks
    AlanP
    • #7
    • 5th Oct 17, 1:38 PM
    • #7
    • 5th Oct 17, 1:38 PM
    With "bullet loans" i.e. when the capital is to be repaid in one hit, at the end date you often see people selling up as the date approaches.

    It is at the repayment point that the borrower is more likely to say "sorry, hasn't quite worked out as planned".

    If a lender has had 11 months interest on a 12 month loan for example why take that chance?

    Having said that I don't do it, and just stick with them normally.

    Deadlines for repayment often get extended, particularly on property loans - have you ever known a builder complete on the day they say they will? Not knocking builders but when the project started that 12 months or whatever was only a best guess and things crop up.

    The current MT loans available have been the same few for a while now.

    Have you joined http://p2pindependentforum.com/ - covers a lot of the platforms and has knowledgeable posters.

    A point was made on there the other day that this is often a quiet time of year for new loans as things slow down over the Summer with Valuers / Solicitors etc. taking leave.

    Ablrate tends to only have a few new deals trickling through but the SM is usually quite active although you may have to pay a premium to get into some of the loans on there.
    • MoneyGeoff
    • By MoneyGeoff 5th Oct 17, 2:39 PM
    • 74 Posts
    • 36 Thanks
    MoneyGeoff
    • #8
    • 5th Oct 17, 2:39 PM
    • #8
    • 5th Oct 17, 2:39 PM
    Thanks. I see so in that scenario the seller has had 11/12 months interest and gets their capital back, whereas the buyer is risking all their capital for a chance of 1 month interest.

    Definitely want to be avoiding that then. I know with the rate setter 5 year I get captial and interest back each month. I'll have to read up on which of the other sites work in the same way and which are 'bullet' style.
    • AlanP
    • By AlanP 5th Oct 17, 9:23 PM
    • 935 Posts
    • 637 Thanks
    AlanP
    • #9
    • 5th Oct 17, 9:23 PM
    • #9
    • 5th Oct 17, 9:23 PM
    Thanks. I see so in that scenario the seller has had 11/12 months interest and gets their capital back, whereas the buyer is risking all their capital for a chance of 1 month interest.

    Definitely want to be avoiding that then. I know with the rate setter 5 year I get captial and interest back each month. I'll have to read up on which of the other sites work in the same way and which are 'bullet' style.
    Originally posted by MoneyGeoff
    Not so much a site by site basis, more loan by loan,

    Property is typically "bullet", other asset types can vary depending on how deal is structured.

    Have a look at the loans on ABL, a number of those are amortising so work like a repayment mortgage from the borrowers point of view.
    • Fatbritabroad
    • By Fatbritabroad 5th Oct 17, 9:38 PM
    • 174 Posts
    • 74 Thanks
    Fatbritabroad
    With "bullet loans" i.e. when the capital is to be repaid in one hit, at the end date you often see people selling up as the date approaches.

    It is at the repayment point that the borrower is more likely to say "sorry, hasn't quite worked out as planned".

    If a lender has had 11 months interest on a 12 month loan for example why take that chance?

    Having said that I don't do it, and just stick with them normally.

    Deadlines for repayment often get extended, particularly on property loans - have you ever known a builder complete on the day they say they will? Not knocking builders but when the project started that 12 months or whatever was only a best guess and things crop up.

    The current MT loans available have been the same few for a while now.

    Have you joined http://p2pindependentforum.com/ - covers a lot of the platforms and has knowledgeable posters.

    A point was made on there the other day that this is often a quiet time of year for new loans as things slow down over the Summer with Valuers / Solicitors etc. taking leave.

    Ablrate tends to only have a few new deals trickling through but the SM is usually quite active although you may have to pay a premium to get into some of the loans on there.
    Originally posted by AlanP
    I've just dipped my toe in to p2p after using ratesetter just for a 1000 to get the intro bonus. Now have 3 k with ablrate. I might be looking at this too simply but I don't really care if I am paying a premium to get invested at this early stage.I have no. More than about 200 with any one loan (have checked if it's the same companies doing the borrowing and adjusted my investment accordingly) and ultimately its about the interest rate. Whether it's 99% or 102% as a cost or benefit doesn't matter. It cost me about 35 quid to get all 3k invested and it's taken me a month to make that back so everything onwards is pure interest. Am I thinking to simply have I misunderstood?
    • Drp8713
    • By Drp8713 5th Oct 17, 9:57 PM
    • 746 Posts
    • 617 Thanks
    Drp8713
    Its not just the discount or premium, its also the trailing interest you pay upfront.

    I was the same as you, was about £25 down on a £2100 investment to become fully invested, I am now £20 up, I have been invested for two months now.
    • Fatbritabroad
    • By Fatbritabroad 5th Oct 17, 10:02 PM
    • 174 Posts
    • 74 Thanks
    Fatbritabroad
    Its not just the discount or premium, its also the trailing interest you pay upfront.

    I was the same as you, was about £25 down on a £2100 investment to become fully invested, I am now £20 up, I have been invested for two months now.
    Originally posted by Drp8713
    Yes sorry I was kind of including that I'm the premium. That and checking there isnt just a month to go on the loan!
    • Drp8713
    • By Drp8713 5th Oct 17, 10:34 PM
    • 746 Posts
    • 617 Thanks
    Drp8713
    Yes I aim for the longest duration loans. I want to lock in 12-14% loans in case they are not available in the future.

    Rule of 72 says 5-6 years to double my money at those rates if I keep reinvesting proceeds.
    • bigadaj
    • By bigadaj 6th Oct 17, 4:08 AM
    • 10,286 Posts
    • 6,601 Thanks
    bigadaj
    I wouldn't use an auto lend platform or process, each offering is unique and the attractiveness depends on the due diligence and value of secured assets as well as the return, there's also the fact that the rates in the individual loans are far higher.

    You're effectively making a secured loan each time, to get good diversification then you need to make relatively small investments over large numbers of loans, which can be time consuming. I find it interesting to review the offerings and view the discussion on the independent forum but for many it might be considered too much like hard work. However that's the only way to provide a good level of confidence that defaults will be limited to a small percentage of your portfolio if and when they occur.
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