Peer-to-peer lending sites: MSE guide discussion

ToiletDuck65

I thought I should mention my recent experience with Funding Circle.
While I have enjoyed rates of about 7.5% before tax, these have reduced to nearer 5%, the bad debt seems to have increased to me. I believe that they have really been pushing loans rather than investment to satisfy demand. This seems to have led to loans to higher risk lenders.

But my main point is that the current selling times, if you want to get your cash out, are 57 days! So instant access it is not.
I can only assume there aren't enough investors currently.

MaxiRobriguez

Pool of investors is likely to be declining as debt levels hit record highs and investors move to more defensive investments to protect against defaults in a possible upcoming recession.

I missed the boat on P2P. I won't invest now.

fun4everyone

MaxiRobriguez wrote: »

Pool of investors is likely to be declining as debt levels hit record highs and investors move to more defensive investments to protect against defaults in a possible upcoming recession.

I highly doubt that is the logic behind most people leaving p2p

It's more likely that the rates are crap, the borrowers all default and the platforms do **** all to recover loans. Several platforms have collapsed and imo facilitated outright frauds on some loans due to them not giving a **** where lenders money goes. The FCA's regulation has also been utterly useless.

MaxiRobriguez

fun4everyone wrote: »

I highly doubt that is the logic behind most people leaving p2p

It's more likely that the rates are crap, the borrowers all default and the platforms do **** all to recover loans. Several platforms have collapsed and imo facilitated outright frauds on some loans due to them not giving a **** where lenders money goes. The FCA's regulation has also been utterly useless.

Most people no, but most people are only sinking in a few hundred quid most likely. Investors with much larger capital allocated will think more about the systematic risks that are building.

KTF

I am actively taking my money out of Assets Capital because:

a) There are more vote emails asking how to proceed with borrowers who are in default.
b) This is only going to happen more IMO.
c) They like to kick the can down the road several times rather than try to get any money back - Morgan Duffield is a very good example of this.

And d) last years tax statement showed I made a loss (mainly because of c) so time to move on for me.

grumpycrab

(mainly) good experiences with P2P for me; my lessons - ensure that amounts leant to individuals are small enough (in % terms) so that if there is a problem (that's not covered by the P2P company safe-guards) it won't majorly affect overall performance; P2P is not a short-term thing; very pleased overall with Zopa and Ratesetter.

KTF

The problem with AC is that you have no control (unless you go for the manual option) where the money is lent.

Most of my lent amounts are very small and spread across hundreds of companies. Apart from the company mentioned in c) above which has nearly £4k stuck in it all thanks to their algorithm doing something daft which is very annoying.

Nova54

I chose a peer to peer lending site that fitted in with what I know and understand. I’ve been involved with land, property and development for over 35 years so it was an obvious choice for me to chose a site that lent exclusively to property developers.
I didn’t view it as savings or investment but rather as lending. I’ve been lending now for 4 years and while at the start I seemed to get borrowers paying back on time there certainly has been a change in the last 12 months. I think it’s the uncertainty of Brexit. I currently have a loan out which is over 10 months overdue, imagine, that’s on a 12 month loan agreement. But for me that’s not an issue of not getting paid back, but just the lack of knowledge of when the loan will be paid off to me. Sometimes there’s lack of worthwhile updates as to the progress a borrower is making with their project or whatever. I have a good deal of faith in the website I deal with, this being judged by an experience where one borrower defaulted. In short, I received all my loan and interest money back, no problem.
I know that peer to peer is not for everyone but for those that have that bit of money they can afford to lose. If you look at the stockmarket, last year the FTSE100 made no progress so 7% isn’t too bad in my opinion. Similarly landlords would think that 7% was a good return and when you consider that there’s no tenant issues, no maintenance, no accountancy or tax hurdles to comply with, why bother with that, there’s only capital appreciation. For me it's part of a balanced approach to savings with an eye on risk/reward and return/grief factor.

Kevin_Price

Hi. After reading Martin's article, I tried to move my ISA out of ZOPA. The AA wouldn't accept the transfer from what is an IFISA. Is there an ISA provider who will accept my transfer? Thanks for any help.

Thrugelmir

Nova54 wrote: »

If you look at the stockmarket, last year the FTSE100 made no progress so 7% isn’t too bad in my opinion.

Many companies pay dividends. Indices don't include reinvested income. While I hold FTSE 100 stocks within my portfolio. I don't hold the index as such. As contains companies that I wouldn't wish to be invested in.