Peer to peer lending - Zopa, RateSetter, FundingCircle etc

plunt

firstly i would like to start by saying at had up to 1k in zopa and now down to about 600 (not a lot but like playing around with it there), i have also used ratesetter and funding circle (just started funding circle)

the thing that puts me off from ratesetters (other than the low rates now) is the inability to sell out early. Where as zopa and FC have secondary markets to get out (you can even make a profits on the FC secondary market!)


i therefore have fulled out of ratesetters and building a small portfolio with only A* ratings in FC and Zopa and hopefully that distributes some risk.


but would highly recommend people keep in mind the ability of secondary markets as then you can reinvest any of the income immediately (in the case of zopa) and you will get closer to the headline rates! (if your rates are set low enough!)


regards


P

MiserlyMartin

easteregg wrote: »

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).

I don't feel safe keeping money in p2p that isn't relatively easy to withdraw. With these bonds you are stuck if you needed to get your money. The rate is now 3.0% :eek:, and I'm in the process of all monthly loans coming to an end and withdrawing to the 'safety' of FSCS backed accounts

jamesd

Why stick to FSCS backed savings accounts? You've shown you're willing to put capital at risk with the P2P use so why not switch to some of the ISA income funds instead? Having say the 8.8% from the Newton Global High Yield Bond fund tax free inside an ISA, with variable capital value, looks a good deal higher than anything you can get from P2P these days. And you get FSCS protection for things other than investment performance.

blizeH

Thanks, any reason in particular you recommend the Newton one though? http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/n/newton-global-high-yield-bond-income/charts

I have a Vanguard at the moment and it seems to be performing well, I've maxed out my ISA allowance though so unfortunately can't invest any more until April

jamesd

I mentioned it because it has one of the higher yields and its total return has beaten the FTSE All Share index over five, three and one years. It's pretty easy for someone to see that 8.8% tax free in an ISA beats the P2P lending without having to get into the capital value part.

MiserlyMartin

Ratesetter now a dead loss. Monthly market rate now a pathetic 2.6%!!!!

psychic_teabag

It's not quite as bad as that. The front page is showing the highest rate that a waiting borrower is offering, but that doesn't mean you can't ask (and get) more than that. The lowest offer is 3.0% as I write. (Still far too low for me to consider, though.)

blizeH

Going by http://www.p2pmoney.co.uk/compare/lend.htm is it safe to say I should take my money out of Zopa/RateSetter and put everything into FundingCircle? ;o

jamesd

Not really. Why would you want rates that low when you can get better results on your investments in the non-p2p area? P2p can be great and I love the concept but now isn't one of those great times. Just do something else for a while and return to p2p when it pays better than it does at the moment.

If you do want to constrain yourself to the p2p capital at risk investment area then Funding Circle seems to be the best rates at the moment.

pqrdef

blizeH wrote: »

Going by http://www.p2pmoney.co.uk/compare/lend.htm is it safe to say I should take my money out of Zopa/RateSetter and put everything into FundingCircle? ;o

Nope.

But is P2P now also going to succumb to the tyranny of the price comparison sites?