Peer-to-peer lending sites: MSE guide discussion

arbster

Is Zopa doing a referral deal at the moment? Can't see without signing-up, which rather defeats the object.

gowgowuk

arbster wrote: »

Is Zopa doing a referral deal at the moment? Can't see without signing-up, which rather defeats the object.

yes: Send your friends an invitation to join and you’ll get £50 for each one that gets a loan or lends over £2,000. They’ll get £50 too.

I'll send you mine in PM!

jamesd

Why would you want to use Zopa or RateSetter and get around 5% when you can instead get around 12% using SavingStream, MoneyThing or Ablrate for secured lending?

I suggest that you ignore gowgowuk's offer. Those in the referral section typically offer to pay you a significant portion of their own cut, with offers there that get you £90, £85 and more combinations, not just £50.

arbster

jamesd wrote: »

Why would you want to use Zopa or RateSetter and get around 5% when you can instead get around 12% using SavingStream, MoneyThing or Ablrate for secured lending?

I suggest that you ignore gowgowuk's offer. Those in the referral section typically offer to pay you a significant portion of their own cut, with offers there that get you £90, £85 and more combinations, not just £50.

As you probably know, james, I'm already using those sites too, but wanted check out what Zopa has to offer, with a slightly different risk profile. As you say, some kind of kick back on the referral would be preferable, so I shall be looking at other options.

rwgray

jamesd wrote: »

Why would you want to use Zopa or RateSetter and get around 5% when you can instead get around 12% using SavingStream, MoneyThing or Ablrate for secured lending?

SavingStream looks good with a fixed return of 12%. I don't mind having to reinvest regularly, although it may mean that your effective rates can come down much faster than with a 60-month fix. Is there an introduction incentive? It may be worth moving funds to this platform from Funding Circle.

Rich.x

Thrugelmir

jamesd wrote: »

Why would you want to use Zopa or RateSetter and get around 5% when you can instead get around 12% using SavingStream, MoneyThing or Ablrate for secured lending?

Perhaps the interest rate offered is reflective of the risk. :think:

TheTracker

Thrugelmir wrote: »

Perhaps the interest rate offered is reflective of the risk. :think:

In my view, probably not. As a new market I consider P2P far from efficient. Volumes on newcomers like SS are driven more by liquidity and rate than risk. I have no doubt you'd see real risks of anywhere from 8-16% if they are advertising 12% return. To me, that's the appeal of investing with a secured loan platform rather than a spread risk platform like RS, where I can choose safer loans and find bargains. In the states where P2P platforms have APIs you now find bots that algorithmicly look for mispriced risk and you can even invest through the fee-charging bots rather than auto bidding. Over time things will smooth out and a body like me can take a more passive approach.

Thrugelmir

TheTracker wrote: »

In my view, probably not.

I'm looking from the borrowers perspective not the lenders.

Over 12% is very high for "secured" borrowing.

masonic

Thrugelmir wrote: »

I'm looking from the borrowers perspective not the lenders.

Over 12% is very high for "secured" borrowing.

If you compare with rates offered by pawnbrokers (thinking of MoneyThing in particular), then it seems like rather a good deal for the borrower.

Edit: Nice to see this thread being used for actual discussion again.

Thrugelmir

masonic wrote: »

If you compare with rates offered by pawnbrokers (thinking of MoneyThing in particular), then it seems like rather a good deal for the borrower.

I doubt companies use pawnbrokers. There are plenty of asset leasing companies (arms of major lenders) in the marketplace.

Even individuals can obtain sub 12% rates if property is the security. Though comparatively much higher than standard mortgage rates.