Peer-to-peer lending sites: MSE guide discussion

buyhighselllow

masonic wrote: »

For those interested, Ratesetter's operating company has published its accounts at Companies House, showing the £26.7m loss for the year reported earlier this month, which is a cumulative loss of over £50m over 2 years. Some further commentary available here.

Thats it, I'm out of them, just sold my 5 yr holdings off..will continue to reduce my P2P exposure going forwards

Alexland

I am keeping my nerve and will withdraw from Ratesetter after our 12 month bonus period in May.

fun4everyone

Almost every p2p site shows yearly losses, and it has been that way for quite a while.

IIRC there is maybe one or two that buck the trend.

Nardge

fun4everyone wrote: »

Almost every p2p site shows yearly losses, and it has been that way for quite a while.

IIRC there is maybe one or two that buck the trend.

Thanks to Masonic for giving us all a head's up...

Whilst it is important to be aware, I don't think we need to over-react?

P.S. What does IIRC denote? 'If I Recall Correctly'?

buyhighselllow

P2P IMHO has the potential to be a house of cards..I've raided the cookie jar for a few years, got the bonuses. I've seen some awful lack of due diligence and realised I'm way overexposed. Yes 6+% is attractive and I would like enough in this platform to give the growth I need over the next few years..but..I just do not trust most of them. For me the risk is not worth the reward in many cases. I'm still in some, and will reduce some more and maintain some others, but I will sleep that bit easier tonight being out of another.

itwasntme001

I agree with the above post, P2P is a bit like picking up pennies on a road at the risk of being run over by a bus. If say one of these platforms do go bust, you will have potentially a very large haircut on your "investment" due to the administrators wanting their fair share.



Also if the uk economy does get worse, some of the loans will turn sour. Many of the loans are 3-5 year duration so unless you get out early, it will be too late to liquidate when everyone knows there are many defaults on the way and trying to sell at the same time.

masonic

Nardge wrote: »

Thanks to Masonic for giving us all a head's up...

Whilst it is important to be aware, I don't think we need to over-react?

I'm not "selling out" of my RS loans (all 5 year term at >6.5%), but I won't be increasing my holdings or reinvesting repayments/income.

I think it's worth having an awareness of the finances of the companies running these platforms. It's interesting that other higher rate platforms are profitable and is further evidence that a low rate in P2P does not mean low risk. In fact, it could be argued that the reason the operating loss is so large this year is because RS wrote loans that were too risky and had to write these off and soak up the loss so that lenders did not suffer a loss themselves - something that is not likely to continue to happen forever.

Loss making businesses can carry on for some time providing they can find financial backing to prop them up, such as that provided to RS by Neil Woodford amongst others.

quirkydeptless

Just to test the water I only made the daintiest of toe dips into the P2P pool, with a £1000 investment in a 5Y loan on Ratesetter, with the repayments getting auto-invested into the rolling market.


I get a £100 bonus in April and I will leave it be and hope there is something still there for me after 5 years, but on the upside it has made about 5.5% so far since April :xmassmile

dont_use_vistaprint

quirkydeptless wrote: »

Just to test the water I only made the daintiest of toe dips into the P2P pool, with a £1000 investment in a 5Y loan on Ratesetter, with the repayments getting auto-invested into the rolling market.


I get a £100 bonus in April and I will leave it be and hope there is something still there for me after 5 years, but on the upside it has made about 5.5% so far since April :xmassmile

That's similar to how I started, blocks of £1-£3K, but I used Funding Circle initially as it has a secondary market that's free of charge, and one of the biggest teams in recoveries so even safer while you are finding your feet. Good luck but remember, as with stocks, its neither lost or gained until the point you exit

elephantrosie

i like how you said it- neither lost or gained until you get out of it!