Peer-to-peer lending sites: MSE guide discussion

keyboardworrier

takesyourchances wrote: »

@keyboardwarrior I filled out the MT questionnaire in favour of it, I'd like to see this in place as the secondary market can be crazy slow with months in some cases. It should help the exit process if this was brought in

I also voted in favour, hopefully we are in the majority and it happens. I understand that this can cause it's own issues with people buying up large amounts of loans they perceive to be good looking to profit later but that comes with its own risks for anyone doing that!

Malthusian wrote: »

It would be an act of great optimism and courage to not accept any offer to get rid of a portfolio of loans which is complete junk and which exposes you to the possibility of legal claims to get you to hand over even more money.

I'd pay someone money to take that loan off my hands. Lendy, if you're listening....

takesyourchances

keyboardworrier wrote: »

I also voted in favour, hopefully we are in the majority and it happens. I understand that this can cause it's own issues with people buying up large amounts of loans they perceive to be good looking to profit later but that comes with its own risks for anyone doing that!

Hopefully this will happen, the system works with Ablrate, certainly in the present market conditions, compared to Ablrate's secondary market system Moneything has been extremely illiquid on many loans. The Liverpool development loan I have £550 for sale for several months now and it is still behind £344,998 at the moment, I would quite happily reduce to get out of this loan and put remaining funds to other uses. The holiday park in Scotland I am now behind £1,372 nearly there but still a slow processs

masonic

bxboards wrote: »

Looks like Lendy is shutting up shop - this has always one of my 'wouldn't touch it with a barge pole' platforms.

Front page on Financial Times:

https://www.ft.com/content/a19cd1d8-db65-11e8-9f04-38d397e6661c

The FT clearly don't like Lendy much, and while I share their general sentiment, it doesn't really excuse the shoddy journalism. I got out without ever being exposed to a defaulted loan quite some time ago, before the FCA made them change their name from SavingStream and have spent quite some time raising awareness of their dodgy conduct so others could avoid the fallout that is now happening. That said, selling off the no-hoper loans is probably the best thing they can do, but rumours of them shutting shop seem greatly over-exaggerated.

takesyourchances wrote: »

@keyboardwarrior I filled out the MT questionnaire in favour of it, I'd like to see this in place as the secondary market can be crazy slow with months in some cases. It should help the exit process if this was brought in

keyboardworrier wrote: »

I also voted in favour, hopefully we are in the majority and it happens. I understand that this can cause it's own issues with people buying up large amounts of loans they perceive to be good looking to profit later but that comes with its own risks for anyone doing that!

I'm also happy to support a proper market. I don't think this change will meet much resistance.

short_butt_sweet

Nardge wrote: »

Could you advise of any other dubious platforms to less knowledgeable investors such as myself?

if in doubt, assume they all are.

(that's not a joke, BTW )

keyboardworrier

An update has been posted on the Lendy webpage set up for the vote for anyone that is invested in that particular loan!

Nardge

An interesting article on the 4th Way website regarding Lendy:

https://www.4thway.co.uk/news/lendy-sends-shockwaves/?utm_source=4thWay%20News%20and%20Tips&utm_campaign=cee306c07d-4thWay_News_and_Tips_50&utm_medium=email&utm_term=0_415f2326f1-cee306c07d-583091249

I found the subsequent reader's comment food-for-thought:

"I have yet to find a P2P lending site which does not warn potential investors that they may lose money, that past performance is no guarantee, but I’ve yet to find one warning that you may be at risk of law suits, law suits for claims many times in excess of the loan contribution you made…that is the real story, the story you should have addressed.

Your piece creates a fictitious and misleading picture of Lendy as something separate, something remote to your wise readers, it is not, the claims currently made against Lendy could have been made against any P2P lender, this is an industry battle not a Lendy one.”

The following might also be useful, particularly for newbies:

https://www.4thway.co.uk/candid-opinion/failed-p2p-lending-sites-similarities/?utm_source=4thWay%20News%20and%20Tips&utm_campaign=cee306c07d-4thWay_News_and_Tips_50&utm_medium=email&utm_term=0_415f2326f1-cee306c07d-583091249

With Kind Regards

Nardge

jamie.blower wrote: »

If you're planning to start investment with Zopa UK Loans, you can gain £50 to your investment when using this link:

zopa.com/lending/mgm/f0ed377ecdc4

You'd be wise to post that on the 'referrals' board and delete it here

itwasntme001

Ive been "investing" in P2P for over 2 years now. From my experience it simply has not been worth it as the returns have not been worth it for the risk taken. Stock market would have been a lot better investment.


What people need to realize is that P2P is highly cyclical and will have bad periods especially when a recession hits. You could say the same with the stock market, but as long as you have a long time horizon and are diversified, you can weather the down cycles. With P2P you can not as capital will be permanently lost as defaults rise. Now you could try to sell down the P2P loans when there are recession signs - but all i can say is good luck to that! It wont be nearly as easy as you think it is.


With the recent Lendy issue this raises even more potential risks with P2P and quite frankly i feel a bit stupid for not realizing this sort of risk exists when you have platforms acting as agents. I have been told by various people in my life to never sign something before reading and understanding what you are signing. It seems to have been forgotten with P2P platforms. You are really at the mercy of the platform looking out for your interests....

AdrianC

Nardge wrote: »

...the claims currently made against Lendy could have been made against any P2P lender, this is an industry battle not a Lendy one.”

I'm not even sure it's particularly P2P-specific. ANY syndicated lending could have the same issue.

At the end of the day, it's a loon who's happier to lob baseless, vexatious lawsuits about than to repay the money they borrowed. Yes, perhaps the DD should have been better, and they should never have been allowed the loan in the first place. That's a separate question.

itwasntme001 wrote: »

Ive been "investing" in P2P for over 2 years now. From my experience it simply has not been worth it as the returns have not been worth it for the risk taken.

While I've been lending through P2P for over four years, and am currently sitting at XIRR of 6.2%.


Lendy is sitting at XIRR of 11% for me, and even if not one single penny of any of my outstanding duff loans is returned, I'll still be in profit with them (albeit not much). If they go according to my recoveries from duff loans to date, and no better, then I'll be looking around 5% XIRR.

itwasntme001

AdrianC wrote: »

I'm not even sure it's particularly P2P-specific. ANY syndicated lending could have the same issue.

At the end of the day, it's a loon who's happier to lob baseless, vexatious lawsuits about than to repay the money they borrowed. Yes, perhaps the DD should have been better, and they should never have been allowed the loan in the first place. That's a separate question.


While I've been lending through P2P for over four years, and am currently sitting at XIRR of 6.2%.


Lendy is sitting at XIRR of 11% for me, and even if not one single penny of any of my outstanding duff loans is returned, I'll still be in profit with them (albeit not much). If they go according to my recoveries from duff loans to date, and no better, then I'll be looking around 5% XIRR.

You are confirming exactly what i have been saying. You invested for over 4 years. I have been investing in P2P for over 2 years. My XIRR does not come close to yours, its more like 3-4%. A difference in investing time span of around 2 years only, suggesting net returns have certainly fallen over the years. Now of course you could have invested in different platforms and with different amounts to me which would also explain the difference, but i am assuming you have similar risk tolerance and return expectations to me thus our decisions in which platforms and how much to invest would be similar.