Peer-to-peer lending sites: MSE guide discussion

masonic

xiaogu said:

Hi everyone, I am new to this forum, Hope could some help from here and please  tolerate my English. 
I can not sleep. As my investment in Ratesetter seemed very dangerous. 
on 20th March, I released all my invest, but be told need to wait until new investor could take over my place. I can not withdraw my funds at all.
I check my account, founds everyday I got paid by borrowers back, but could not withdraw as all those back to markets again, my understanding is those money be used pay the investors who releasing money before. 
I think it is very wrong. As we(investors) have contracts with borrowers. If they paid back to me, why these money should be paid to others?
Very appreciate if could get some help or explation. 
Thanks.

Ratesetter is limiting withdrawals so that all the money being withdrawn does not leave them in a position where they cannot make any new loans to borrowers in future months. They are also doing so to keep the interest rates low and competitive for borrowers.

A withdrawal I made from the old 5 year market on 13th March has been repaid yesterday on 2nd April. I am told requests for the new markets are taking longer (they are phasing out the 5 year market so processing those requests a bit faster). So you will probably get your money in about a month.

Borrowers are paying back in line with their contracts - they are typically taking out loans of 1-5 years. So they will be making capital repayments of between £15-80 of each £1000 borrowed each month. That is not enough to satisfy all the withdrawal requests at the present time, and some of it is being used to fund new loans so Ratesetter doesn't get into financial difficulties itself.

The way Ratesetter works is that everyone is exposed to the whole loan book, with those whose loans default being repaid out of the provision fund, and if the provision fund is depleted, everyone shares the cost of replenishing it. So the individual loans you hold do not determine your financial outcome or the access you have to the money you've invested.

xiaogu said:

 Hi Drphila,  how it is work? set your own rate as high as possible or as low as possible to get money back? 
I released my invest already, Set my rate very high 8%, thought this high rate is impossible to lent out, so it is easy to get money back. What is your way? Thanks .Xiao

Just set a very high reinvestment rate, then when you see the money on the market for investment, cancel the order. I don't think anyone has come back to confirm this really works, so please do if you try it. This may allow you to withdraw a small amount of your money on loan each month.

firestone

masonic said:

xiaogu said:

Hi everyone, I am new to this forum, Hope could some help from here and please  tolerate my English. 
I can not sleep. As my investment in Ratesetter seemed very dangerous. 
on 20th March, I released all my invest, but be told need to wait until new investor could take over my place. I can not withdraw my funds at all.
I check my account, founds everyday I got paid by borrowers back, but could not withdraw as all those back to markets again, my understanding is those money be used pay the investors who releasing money before. 
I think it is very wrong. As we(investors) have contracts with borrowers. If they paid back to me, why these money should be paid to others?
Very appreciate if could get some help or explation. 
Thanks.

Ratesetter is limiting withdrawals so that all the money being withdrawn does not leave them in a position where they cannot make any new loans to borrowers in future months. They are also doing so to keep the interest rates low and competitive for borrowers.

A withdrawal I made from the old 5 year market on 13th March has been repaid yesterday on 2nd April. I am told requests for the new markets are taking longer (they are phasing out the 5 year market so processing those requests a bit faster). So you will probably get your money in about a month.

Borrowers are paying back in line with their contracts - they are typically taking out loans of 1-5 years. So they will be making capital repayments of between £15-80 of each £1000 borrowed each month. That is not enough to satisfy all the withdrawal requests at the present time, and some of it is being used to fund new loans so Ratesetter doesn't get into financial difficulties itself.

The way Ratesetter works is that everyone is exposed to the whole loan book, with those whose loans default being repaid out of the provision fund, and if the provision fund is depleted, everyone shares the cost of replenishing it. So the individual loans you hold do not determine your financial outcome or the access you have to the money you've invested.

xiaogu said:

 Hi Drphila,  how it is work? set your own rate as high as possible or as low as possible to get money back? 
I released my invest already, Set my rate very high 8%, thought this high rate is impossible to lent out, so it is easy to get money back. What is your way? Thanks .Xiao

Just set a very high reinvestment rate, then when you see the money on the market for investment, cancel the order. I don't think anyone has come back to confirm this really works, so please do if you try it. This may allow you to withdraw a small amount of your money on loan each month.

Can confirm that if you set your rate high on reinvestment once that money is in the queue to be loaned you can then edit that order at that point and cancel the order or orders and the money is returned to your holding account  to be withdrawn/wait and see/ or use another market/transfer to ISA etc(done it before and was still allowing yesterday)
Works while waiting for a lump sum to clear the system at the moment as well

drphila

firestone said:

masonic said:

xiaogu said:

Hi everyone, I am new to this forum, Hope could some help from here and please  tolerate my English. 
I can not sleep. As my investment in Ratesetter seemed very dangerous. 
on 20th March, I released all my invest, but be told need to wait until new investor could take over my place. I can not withdraw my funds at all.
I check my account, founds everyday I got paid by borrowers back, but could not withdraw as all those back to markets again, my understanding is those money be used pay the investors who releasing money before. 
I think it is very wrong. As we(investors) have contracts with borrowers. If they paid back to me, why these money should be paid to others?
Very appreciate if could get some help or explation. 
Thanks.

Ratesetter is limiting withdrawals so that all the money being withdrawn does not leave them in a position where they cannot make any new loans to borrowers in future months. They are also doing so to keep the interest rates low and competitive for borrowers.

A withdrawal I made from the old 5 year market on 13th March has been repaid yesterday on 2nd April. I am told requests for the new markets are taking longer (they are phasing out the 5 year market so processing those requests a bit faster). So you will probably get your money in about a month.

Borrowers are paying back in line with their contracts - they are typically taking out loans of 1-5 years. So they will be making capital repayments of between £15-80 of each £1000 borrowed each month. That is not enough to satisfy all the withdrawal requests at the present time, and some of it is being used to fund new loans so Ratesetter doesn't get into financial difficulties itself.

The way Ratesetter works is that everyone is exposed to the whole loan book, with those whose loans default being repaid out of the provision fund, and if the provision fund is depleted, everyone shares the cost of replenishing it. So the individual loans you hold do not determine your financial outcome or the access you have to the money you've invested.

xiaogu said:

 Hi Drphila,  how it is work? set your own rate as high as possible or as low as possible to get money back? 
I released my invest already, Set my rate very high 8%, thought this high rate is impossible to lent out, so it is easy to get money back. What is your way? Thanks .Xiao

Just set a very high reinvestment rate, then when you see the money on the market for investment, cancel the order. I don't think anyone has come back to confirm this really works, so please do if you try it. This may allow you to withdraw a small amount of your money on loan each month.

Can confirm that if you set your rate high on reinvestment once that money is in the queue to be loaned you can then edit that order at that point and cancel the order or orders and the money is returned to your holding account  to be withdrawn/wait and see/ or use another market/transfer to ISA etc(done it before and was still allowing yesterday)
Works while waiting for a lump sum to clear the system at the moment as well

Ditto, as I've already said in a different thread. As I also said, this wasn't my idea. It came from Financial Thing.

ZeroSum

masonic said:

bluenun said:

drphila said:

bluenun said:

That is what I thought would happen to the funds too.
I am not sure about any settings but did e-mail Ratesetter with this question, the reply makes me think that there are no settings for me to change.

"I started the Withdrawal process on March 22nd but see it is still pending 5 days later.

My funds are being reinvested which I do not want to happen, can you assist please?"

This was the response I received,
"As your funds are invested in the Access product, capital and interest will always reinvest even if you have requested a sell out. There is not a way you can switch off the reinvestment. Once the funds are released then of course the funds will become available to you. 

Given the context of the wider investments environment and the current circumstances, we have received a spike in requests to release invested money. This has meant that we have not been able to process requests as quickly as usual.

We are continuing to process ‘release investment’ requests as quickly as possible, however, we are unable to guarantee a time-frame as to when your funds will be released. We have taken the decision to reduce new lending so that we are able to focus on delivering for our investors whilst ensuring fair outcomes for our borrowers."

I do find the first paragraph confusing.

Here's the way to have your repayments funnelled into your holding account:

http://www.financialthing.com/ratesetter-review/ 

"Manually set reinvestment rates much higher than the Going Rate to prevent money from being reinvested and then you can cancel the order which would return funds to your Holding Account."

Thank-you for the suggestion.
I had no idea that I was able to change the reinvestment rate, I see you are correct but I am a bit worried about trying that out, mainly because I had a reply to my query from customer services (posted above) and later that day an e-mail explaining that I am in a queue. They may not like it if I try this method.
If I do decide to change the reinvestment rate from 3.2% would I just set it really high like 8% knowing that is unlikely to be taken?
How long were your funds at 8% before you cancelled it?

You're not doing anything wrong by trying this. If you weren't permitted to set your own rate, the option wouldn't exist. As soon as you see that your money is on the market at 8%, you should be able to cancel that order and check if that money is then available for withdrawal.

If that option didn't exist then the option to just not reinvest returned cash would exist. 

ZeroSum

bluenun said:

Oh, is that correct? I cannot find the terms and conditions from when I made the deposit.
Have you started the withdrawal process yet?

They've just coughed up on the £50.
I started the withdrawal about 2 weeks ago, but just in the queue so hopefully won't be too long going by their press releases 

tushkary

I am invested in the old I year markets for Isa and Everyday. I made withdrawals from both on the 19th March (I was a bit slow). I telephoned today and was told that they are releasing investments, from those markets, that were requested on the 11th March.

mikb

ZeroSum said:

They've just coughed up on the £50.

I hope you have sanitized it before paying it in.

alarch83

I'm considering investing in Ratesetter soon as they have a £100 welcome bonus for new investors investing at least £1,000 for a year.  The site looks a lot more straightforward than recent comments suggest - I don't think they allow you to set your own interest rate anymore.

I know someone who's had a long wait to get an investment back from Funding Circle (still waiting for the majority!) who have, due to the coronavirus, just disabled the function for investors to sell loan parts to each other, meaning money will now (for the time being) only be received as and when loans are repaid.

Lots of websites are advising against selling stocks and shares right now - "only then potential losses become real" and "sit tight until markets improve", adding "now is the perfect time to invest (while markets are low) if you have any spare cash".  I'd like some advice on whether now is a good time to invest in P2P given the current circumstances and the impact of the coronavirus on the industry in general, especially if you have experience of a range of the P2P platforms available.  Many thanks in advance.

masonic

alarch83 said:

I'm considering investing in Ratesetter soon as they have a £100 welcome bonus for new investors investing at least £1,000 for a year.  The site looks a lot more straightforward than recent comments suggest - I don't think they allow you to set your own interest rate anymore.

I know someone who's had a long wait to get an investment back from Funding Circle (still waiting for the majority!) who have, due to the coronavirus, just disabled the function for investors to sell loan parts to each other, meaning money will now (for the time being) only be received as and when loans are repaid.

Lots of websites are advising against selling stocks and shares right now - "only then potential losses become real" and "sit tight until markets improve", adding "now is the perfect time to invest (while markets are low) if you have any spare cash".  I'd like some advice on whether now is a good time to invest in P2P given the current circumstances and the impact of the coronavirus on the industry in general, especially if you have experience of a range of the P2P platforms available.  Many thanks in advance.

I think you're very brave.

Alexland

Well if you put money into Ratesetter then you might be helping someone else get their money out. Unlike diversified S&S which will probably bounce back eventually the P2P platforms are offering reduced returns with higher chance of 100% capital loss. We did the RS signup bonus offer a few years ago when it made sense but the risk is too high now so we are completely out of P2P.