Peer-to-peer lending sites: MSE guide discussion

aroominyork

Jordan_Stodart wrote: »

Do we need an economic downturn to shake up P2P is a question I ask myself - thoughts??

Ratesetter's provision fund is tonight showing interest rate coverage of 114% against a target of 125% to 150%, yet with one year loans matching at a tasty 4.8% pa and only £167k on offer at rates up to 10%. So rewards look good but risk, in terms of provision fund coverage, looks high.

Say defaults go beyond the provision fund's interest rate coverage and start eating into capital. Obviously not good, but how would that compare to buying bond funds whose value go down if the same recession leads to corporate defaults increasing? We are used to the idea of equity and bond funds going down but not yet used to the idea of P2P capital loss, but might the risk of P2P capital loss be a better bet than buying bond funds?

takesyourchances

Couple of new loans on Collateral today, took a bit of each and Ablrate sold out quickly, before I was able to get to put funds in due to working, but short duration so not too bothered on that as prefer the longer loans.

TheShape

takesyourchances wrote: »

Couple of new loans on Collateral today, took a bit of each and Ablrate sold out quickly, before I was able to get to put funds in due to working, but short duration so not too bothered on that as prefer the longer loans.

Made my usual small investment in the property loan on Collateral. I'll invest in the new Jewellery loan but I've put up a request on the p2p Independent forum for a bid limit increase. I think they're setting the bid limits too low and leaving too much available for FFF when the limit expires.

Continuing to grab little bits of Bling on the SM but I'm getting short dated stuff and crossing my fingers that they renew.

I missed the Ablrate loan. Verified by Visa on my Tesco Debit card stopped me. I can never remember the password and as the new reset password can't be the same as any of the last 8 passwords used I have to think of a new password which I invariably forget again.

Jordan_Stodart

aroominyork wrote: »

We are used to the idea of equity and bond funds going down but not yet used to the idea of P2P capital loss, but might the risk of P2P capital loss be a better bet than buying bond funds?

It's a good challenge. With P2P you're (mostly) not exposed to market fluctuations as the loans are non-listed. In my opinion, the stability and use of P2P as a diversification tool within my portfolio has been something I've always appreciated. Less volatility, but, risk in capital loss and illiquidity. It's a tradeoff alright!

jamesd

TheShape wrote: »

Made my usual small investment in the property loan on Collateral.

That one is paying 14% but it's behind the earlier 12% one in precedence if there's a default. And the later ones for the same site will be lower in precedence still, though likely a bit higher interest rate again. Pick your place in the priority list and buy the parts of the loan that best match where you want to be in precedence.

economic

Jordan_Stodart wrote: »

It's a good challenge. With P2P you're (mostly) not exposed to market fluctuations as the loans are non-listed. In my opinion, the stability and use of P2P as a diversification tool within my portfolio has been something I've always appreciated. Less volatility, but, risk in capital loss and illiquidity. It's a tradeoff alright!

agree. i have around 3% of my net worth in p2p and will maintain this amount. i feel 3% is just right.

TheShape

jamesd wrote: »

That one is paying 14% but it's behind the earlier 12% one in precedence if there's a default. And the later ones for the same site will be lower in precedence still, though likely a bit higher interest rate again. Pick your place in the priority list and buy the parts of the loan that best match where you want to be in precedence.

Well worth mentioning the order of precedence/rank but it is something I am/was aware of.

I haven't invested in all the property loans and usually only small investments so I'm happy with where I'm sitting in the queue and with far smaller tranches it's likely to be an easier loan to dispose of in the SM should I wish to.

Would it have helped if I'd taken a little of 46?;)

takesyourchances

TheShape wrote: »

Made my usual small investment in the property loan on Collateral. I'll invest in the new Jewellery loan but I've put up a request on the p2p Independent forum for a bid limit increase. I think they're setting the bid limits too low and leaving too much available for FFF when the limit expires.

Continuing to grab little bits of Bling on the SM but I'm getting short dated stuff and crossing my fingers that they renew.

I missed the Ablrate loan. Verified by Visa on my Tesco Debit card stopped me. I can never remember the password and as the new reset password can't be the same as any of the last 8 passwords used I have to think of a new password which I invariably forget again.

I put £100 into the property loan and the £50 into the bling and will put the rest of the bid limit tomorrow fingers crossed. I would of went more on the bling if the limit was higher.

It is easy done with passwords, my mind went blank yesterday with Collateral on the final log in part and it took a couple of mistakes to finally remember it too many online accounts to remember haha

elephantrosie

i thought there were only 2 property loans on col yesterday? was there bling?

jamesd

TheShape wrote: »

Would it have helped if I'd taken a little of 46?;)

(for those who missed it, it's a reference to this post about cashback) I haven't yet sold the portion of my investment in that one that I put up for sale, though about £65,000 worth has been bought since it went live. I plan to keep something like £15k in it because of its priority, which means it'll gradually become less risky over time as the later development loans increase the value of the site. I like higher interest rates but security is also a good thing and I'm content to hold this for quite a while.

elephantrosie wrote: »

i thought there were only 2 property loans on col yesterday? was there bling?

Yes, PL00006, 10%. I got in with £100 while the bid limit was in place (stared at £50, was raised) then a little more after it was removed.