Peer to peer lending - Zopa, RateSetter, FundingCircle etc

jamesd

This is true, though people could always confess if they wanted to.

badger09

jamesd wrote: »

This is true, though people could always confess if they wanted to.

Indeed, but as a lady of a certain age I prefer to retain an air of mystery :rotfl:

MiserlyMartin

blizeH wrote: »

Yeah, I guess it doesn't help that these sites often seem to market themselves more at lenders rather than borrowers. Maybe lenders/savers are more likely to look around too, whereas most people I know who have loans will just go with whoever they have their current account with. (speaking purely from personal experience)

(edit) the current monthly rate on RateSetter has dropped even further, down to just 3.5% now.

Still 3.5%, with the top savers paying 3.2% now and more in regular savers, is it worth bothering with ratesetter now?

JohnRo

If you don't need instant access and accept the short term risks, which are exaggerated by some imho, then 0.3% (gross) is a nice little bit extra, emphasis on little. Bear in mind though that it was 3.9 - 4.0% last month. So this might just be a short term dip or it could of course be a trend.

My last two matches, today, were at 3.5% which has raised the average interest i'll earn next month to just over 3.4% on money matched so far, with a few contracts still to roll before the end of July.

I also ought to say that I believe in p2p and hope to see it gain traction and eventually take on the banks. So part of the reason for my investment with RateSetter is political, not just the slightly better rates on offer.

MiserlyMartin

Yes I believe in p2p but the rate is now so similar to the banks I don't feel its worth the extra risk now. Why are the rates now so low?

badger09

MiserlyMartin wrote: »

Yes I believe in p2p but the rate is now so similar to the banks I don't feel its worth the extra risk now. Why are the rates now so low?

Me too, in principle

Perhaps people are a) disillusioned with traditional banks, b) seduced by headline rates on p2p sites, and c) definitely don't understand the negative impact of tax and bad debts

Money_Grabber13579

Certainly on Zopa, the rates have fallen like a sack of potatoes...Just had a look today and for a 4-5 year loan, masses of people were willing to accept 7% before fees, bad debt, tax etc. Factoring all that in probably brings it down near 4.5%, which is very close to what a good fixed rate ISA over the same period would get you. And a lot less risk...

MiserlyMartin

3.2% now at Ratesetter. Its not worth it anymore, I'm removing my funds.

easteregg_2

MiserlyMartin wrote: »

3.2% now at Ratesetter. Its not worth it anymore, I'm removing my funds.

3.2% is the monthly access rate, and not the only product that RateSetter offer. There is a year-bond (where all of your capital is invested for the whole year) currently paying 4.4% (before tax, after fees and estimated bad debts). The 3 year income product is paying 6.1% and the 5 year income product is paying 7.2% (both before tax, after fees and estimated bad debts).

blizeH

Agreed, but there are added complications, as touched upon before in this thread (and something I didn't even think of) is during that 3 year bond as your funds are slowly returned each month, you have to either put those into the monthly one, or re-invest into another 3 year bond... so really, you'd need to look very long term to guarantee a good rate.

If I'm honest I find Zopa, FundingCircle etc to be quite confusing in terms of finding out the exact rates (allowing for average defaults etc) so will probably just stick with regular savings accounts from now on