Peer-to-peer lending sites: MSE guide discussion

John259

A couple of years ago I put about £3000 into Funding Circle, spread across loans to numerous different companies. Five of those companies defaulted, so I sold the remaining loans and retrieved as much money as possible. I'm now about £35 down.

I still like the peer-to-peer concept in theory, but not in practice in the way that it's implemented by FC.

s71hj

Anybody got any thoughts/ experience on investing with this peer to peer lender. I can find little reference to it on mse. On the face of it the returns seem good. Also if anyone has an incentive or referral link , pm me.

bsms1147

Only 42 loans so far. Small company, they look legitimate, and perhaps one to look out for in the future or to take a risk on now if you're so inclined.

MrOverheads

You can see my experience further back in this thread. But by way of an update: I'm still investing a small amount c£50 in every loan they list (my early amounts were c£200 to £500). I haven't put any new money in for months (but only because I don't have any spare cash) but I'm selling early loan parts to de-risk and also re-investing capital and interest repayments rather than make withdrawals. £4100 across all loans and March generated £59 in interest payments and £102 in Capital repayments, the combined £161 was all rebid on new loans.

Be cautious and perhaps invest say £100 by bidding say £10 per loan on 5 live loans and buy 5 £10 loan parts in the microloan market. That then gives you a flavour of how it works but also doesn't risk £100 all on one loan.

I'm selling a buy-to-let property and will invest a big chunk of the equity released into the platform spreading the risk across many of the microloan parts currently for sale and whatever live bids are available at that time, but I have a high attitude to risk and appreciate many won't be quite so gung-ho with it.

mikb

s71hj wrote: »

Anybody got any thoughts/ experience on investing with this peer to peer lender.

Check here for input from people who are active users :-

http://p2pindependentforum.com/board/23/rebuildingsociety-com

easilyparted

A recent newcomer to peer to peer lending is Landbay. I have yet to invest but the attraction is that you are lending to a number of individuals, not companies. These lenders are now controlled by the FCA which improves confidence in the system.

MrOverheads

easilyparted wrote: »

A recent newcomer to peer to peer lending is Landbay. I have yet to invest but the attraction is that you are lending to a number of individuals, not companies. These lenders are now controlled by the FCA which improves confidence in the system.

Sounds like Zopa?

To also correct you on your post. The lenders are not FCA controlled. The platforms that the lenders lend through are FCA controlled. The individual lenders don't need to register with the FCA.

innovate

MrOverheads wrote: »

Sounds like Zopa?

To also correct you on your post. The lenders are not FCA controlled. The platforms that the lenders lend through are FCA controlled. The individual lenders don't need to register with the FCA.

The poster asked about Landbay, not Zopa (sorry, easilyparted, I have no info or opinion about Landbay - other than I think their name is an unfortunate choice since it is too close to Landbanking, which has a terrible reputation. I know they were probably thinking more of eBay.....still a bit unfortunate).

You are right quite wrong about the relationship between P2P lenders and the FCA. All P2P lenders now need to have an FCA licence, and obviously comply with the regulations laid down by the FCA. Both Zopa and Landbay are licensed accordingly.

MrOverheads

innovate wrote: »

You are right quite wrong about the relationship between P2P lenders and the FCA. All P2P lenders now need to have an FCA licence, and obviously comply with the regulations laid down by the FCA. Both Zopa and Landbay are licensed accordingly.

I think you misunderstand me.....Zopa, Landbay, rebuildingsociety, fundingcircle etc are NOT lenders they are software platforms in the same way that ebay is not a retailer but a software platform. The lender is the person that puts money onto the platform and then loans it out to individuals. Each platform has thousands if not tens of thousands of lenders. If I lend via Zopa for instance I don't have to register for an FCA licence. Zopa takes care of the FCA compliance.

innovate

OK, see what you mean now, and agree, individuals do not need to be registered with the FCA in order to lend money through a P2P firm.