Peer-to-peer lending sites: MSE guide discussion

masonic

adindas said:

masonic said:

adindas said:

Rate Setter " Access Account Interest Rate?  I remember recently I t communication from rate setter that they are going to reduce the Access Accout to Around (2.5%). I have been trying to find that information again, but I could not. Does anyone when is the interest rate?

If you are going to cash your current investment on Rate setter then transfer it internally to your and then transfer it out to your link account, How many days until you could access that account in your Bank Account? Thank

Interest rates have been halved across the board. If you were considering selling up, then you're a bit late to the party. It will be at least several months (based on recent investment release data) before you'll get your hands on your money - at the reduced rates people are even less likely to wish to take over your loans. You can use the trick mentioned earlier in the thread to get a small amount of your money back each month.

masonic said:

adindas said:

Rate Setter " Access Account Interest Rate?  I remember recently I t communication from rate setter that they are going to reduce the Access Accout to Around (2.5%). I have been trying to find that information again, but I could not. Does anyone when is the interest rate?

If you are going to cash your current investment on Rate setter then transfer it internally to your and then transfer it out to your link account, How many days until you could access that account in your Bank Account? Thank

Interest rates have been halved across the board. If you were considering selling up, then you're a bit late to the party. It will be at least several months (based on recent investment release data) before you'll get your hands on your money - at the reduced rates people are even less likely to wish to take over your loans. You can use the trick mentioned earlier in the thread to get a small amount of your money back each month.

From the previous post, I understand the trick here is to set the expected interest rate very hight so when it is roled over, it will not go to the market  but instead, it will be returned to your holding AC. Am I understand it correctly.

I understand that the benefit of access AC is that the money will be rolled over to the market on monthly basis. So they can not refuse to return the money in the due date when you do not want to lend it again.

Could you just not give instruction to stop lending it in the rolling date the follwong month ?? What I have been missing here ??

Yes you can set your own rate above that which will be matched, and any monthly repayments will form a new order on the market that can be cancelled before it is matched.

You fundamentally misunderstand the Access accounts. The benefit of the Access accounts is that they allow you to hold loans with longer terms (up to 5 years), but in normal market conditions, and subject to another investor being available to take over the loans, you can exit your investment before the end of the term of your underlying loans.

You can give an instruction to stop lending, but normal market conditions have ceased, so to get all of your money out you will have to wait until either (A) another lender is available to take over your loans; or (B) the borrower repays the (up to 5 year term) loan in full. This process could take anywhere from several months to years.

It does seem a lot of people are investing in something they don't understand. This is why it is a bad idea to do that.

RDPearson

I have been waiting a few weeks so far. Rather annoyed that I had a small amount in for a while and just increased the amount recently. Just after I increased my investment they dropped their rate. The rate is now lower than my mortgage offset so it makes sense to withdraw and put it in my offset. However the fees they have charged are on the total amount so even though I have been with them for about 6 months I am actually going to get out less than I have put in. Very annoyed that they can change the rate at will but yet still charge all the withdrawal fees.

My investment is via an ISA. Just wondering if there are any laws on ISA transfers that might be applicable? ie maximum time a company has to complete a transfer etc. Maybe this might be a quicker way of getting the money out than waiting months for them.

masonic

RDPearson said:

The rate is now lower than my mortgage offset so it makes sense to withdraw and put it in my offset. However the fees they have charged are on the total amount so even though I have been with them for about 6 months I am actually going to get out less than I have put in.

Borrowing to invest in P2P is an extremely high risk activity, which you will hopefully escape from this time with just a small loss and not repeat.

RDPearson said:

My investment is via an ISA. Just wondering if there are any laws on ISA transfers that might be applicable? ie maximum time a company has to complete a transfer etc. Maybe this might be a quicker way of getting the money out than waiting months for them.

As discussed in another thread recently, if you could find another IF ISA provider willing to allow you to hold Ratesetter loans within their ISA then you could transfer in specie to them. Since there are no such providers, a transfer in cash is your only option. There are no rules requiring investments made in IF ISAs to have liquidity or be tradeable at all. There are also no requirements for P2P loans held in an ISA to be transferable to another provider.

A transfer in specie wouldn't help you get access to your cash anyway, since you'd still be unable break the loan agreements you entered into with the Ratesetter borrowers, and those loan agreements might not require the loans to be fully repaid for up to 5 years. Another provider may not have a secondary market where you could sell those loans to another investor.

A cash transfer only needs to include uninvested cash in the ISA and must be completed within a reasonable amount of time. If you've subscribed to the ISA in the current tax year then those current year funds must be transferred in full, which means if you've used any of that cash to buy P2P loans, you cannot transfer your current year money until all of those loans have repaid or been sold to another investor.

I think its a shame people who desperately need the money can't sell the loans at a discount to others like one could with bonds and equities. That is a feature being introduced at one other P2P platform to help out trapped investors. That would create some liquidity in the market and allow people to take the hit now and move on with their life rather than watch the train crash in slow motion.

Sailtheworld

The horror show continues. Not the fact that the tides gone out on P2P but that so many thought they'd turned the world upside down and were getting high returns for low risk. I'd like to think a valuable lesson might be learnt but that might be a forlorn hope given how most the blame is being externalised.

Albermarle

Some good P2P news amongst the gloom ?
Assetz Capital are  delighted to have been approved for accreditation by British Business Bank as a lender under the Coronavirus Business Interruption Loan Scheme (CBILS).The Coronavirus Business Interruption Loan Scheme, delivered through 60+ British Business Bank accredited lenders, is designed to support the continued provision of finance to UK smaller businesses (SMEs) during the Covid-19 outbreak. The scheme enables lenders to provide facilities of up to £5m to smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.
It will not help Assetz lenders directly , but will give the platform some revenue from lending money to new borowers , so should help to keep it afloat . Plus it is a vote of confidence in their business practices to get the accreditation I guess.

masonic

Where is the money to fund these new loans going to come from? At the same time many customers are struggling to pull their existing money out of the platform.

itwasntme001

Certainly not from me!

I do feel sorry for those who have money stuck with these platforms and need to access it within a short period.  I imagine these people only saw the headline rates and did not appreciate the risk that this headline rate entails.  It does not help that these same platforms have a "fake" seal of approval from the FCA - wrongly interpreted to mean the platform is "safe".  Furthermore, despite the platforms spelling it out on their respective sites that investing in the loans is a risk, perhaps more should be done to spell it out more clearly?

Loan originating should, much like banks, involve skillful underwriters assessing the risks and making a decision on behalf of the lenders whether the loan should be made in the first place and what is the appropriate level of interest rate to charge.  How the platforms are setup - mainly due to no solvency/capital requirements, incentive to originate as many loans as possible and incompetent underwriting teams - encourage very risky and downright irresponsible underwriting by these platforms.  Not for all loans, but the evidence to date points to enough times to have endangered investors financially.

Albermarle

masonic said:

Where is the money to fund these new loans going to come from? At the same time many customers are struggling to pull their existing money out of the platform.

“As a marketplace lender, we are funded by a portfolio of institutions as well as tens of thousands of retail investors. CBILS, necessarily, will only be funded by institutional investors and these currently include UK and European banks, specialist credit funds and our dedicated institutional investment fund. We look forward to originating and managing these new loans for those institutional investors as the country begins its journey to recovery over coming months. 
So no direct involvement from retail lenders, but it will generate fees for the platform and help keep the show on the road.

KeepOnKnitting

Just in case anyone else is searching for the answer as I was almost a fortnight ago, the loan sale from Zopa I requested on April 1st is now being actioned. Effectively it has taken about 6.5 weeks to withdraw from Zopa and sale costs are about 4.7% of the withdrawal amount.

where_are_we

Albermarle said:

Some good P2P news amongst the gloom ?
Assetz Capital are  delighted to have been approved for accreditation by British Business Bank as a lender under the Coronavirus Business Interruption Loan Scheme (CBILS).The Coronavirus Business Interruption Loan Scheme, delivered through 60+ British Business Bank accredited lenders, is designed to support the continued provision of finance to UK smaller businesses (SMEs) during the Covid-19 outbreak. The scheme enables lenders to provide facilities of up to £5m to smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.
It will not help Assetz lenders directly , but will give the platform some revenue from lending money to new borowers , so should help to keep it afloat . Plus it is a vote of confidence in their business practices to get the accreditation I guess.

Gradually unravelling my Assetz Capital position (about 1% of total assets) after some "good" years. In withdrawal queue for 90 day Access Account. My GBBA 2 account is running down and I am withdrawing cash from it as it is released. Should I sell my remaining GBBA 2 loan holdings in the secondary market or is it too late? I am not overwhelmed by the above accreditation news. AC have also introduced a lender membership fee of .9% (annual rate) for 3 months (I would imagine it will continue for longer) - will this keep the "ship floating"?