Peer-to-peer lending sites: MSE guide discussion

masonic

moneyfoolish wrote: »

Do any p2p lending sites other than Zopa give referral fees?

Yes, several others do. You'll find threads for the major ones in the referrer's board.

easteregg_2

moneyfoolish wrote: »

Do any p2p lending sites other than Zopa give referral fees?

The sites that offer cashback to all who sign-up through a referral link are Zopa, Funding Circle, RateSetter, Wellesley & Co and Lending Crowd. There are also some special offers for eMoneyUnion and Funding Secure that are only available from selective organisations.

It is likely that some of these will cease by April 2016 as peer-to-peer will be awash with new Innovative Finance ISA money so these companies will not need to offer referrals to get funds.

jamesd

Also interesting is that those are mainly the ones that don't have particularly interesting interest rates for lenders. Compared to the 10-12%+ from places like Ablrate, MoneyThing and rebuildingsociety for loans secured on various sorts of property.

jamesd

grey_gym_sock wrote: »

with MoneyThing, again you are lending to MT, not directly to the borrower. however, in this case there is a deed of assignment, giving you an equitable interest in the security (which the borrower gave to MT). so this seems to have less platform risk than SS.

Yes, while it's not strictly directly to the borrower in practice you still get the security of what they have pawned, so I definitely favour it over SavingStream. It's actually a growing chain of pawn shops that holds the pawned items.

grey_gym_sock wrote: »

FundingSecure

Though do take a look at discussions and notice how many people use distorted versions of the name to imply that you don't get quite the security you think you're getting. Director's guarantees in particular have proved to be problematic, compared to alternatives.

grey_gym_sock wrote: »

any errors in the above? or other issues / platforms that i'm missing? (i am new to this area.)

It's well worth paying attention to the discussions in the p2pindependentforum.

In date started order here's what I'm using myself:

Zopa: running off existing loans, rates too low to interest me for years.
Bondora: running off existing loans, I no longer trust their underwriting practices to be accurately described and properly executed after repeated inaccurate descriptions and failures. The returns aren't worth it anyway these days, except maybe for secondary market trading.
Ablrate: adding more money.
covered by NDA: adding more money.
MoneyThing: adding more money.
rebuildingsociety: no money here yet but it's interesting and I'll probably use it sometime.

At the moment I have almost all of my available cash and stooze pot at various P2P places and am looking to grow it as I can. I very much like secured lending, whether via P2P or VCT. Particularly when I think that I can get returns after potential bad debt that are above the long term UK stock market average.

rwgray

jamesd wrote: »

rebuildingsociety: no money here yet but it's interesting and I'll probably use it sometime.

Still small enough for the rates to be incredibly attractive, still new enough for the defaults not to be off-putting... although I am moving towards SavingStream just lately.

Rich.x

Jonbvn

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.

This may be true for the direct loans from MoneyThing but not the portfolios, which have been sold on by high street pawnbrokers.

Note that we as lenders are not party to the interest rates charged by MT.

jamesd

stphnstevey wrote: »

by diversify, do you mean investing in small amounts to spread your money over several loans? ... Does this take up much extra time to do?

Both, if you're sensible. It takes more time but the safety increase is worth it.

While it's not really likely that a P2P platform is fraudulent there's always the chance and even without that, if one got into financial trouble it'd be nice to have only part of your invested money involved in the resolution process that'll take care of collecting the payments from borrowers. Thee are also different lending models and types of security and it's nice to diversify among those as well, to reduce systematic risk of one type of lending.

stphnstevey wrote: »

JAMESD - may I ask what proportion of
a) your total investments
b) what proportion of your P2P lending

are invested in the 12% P2P you mention? ...The reason being I am trying to decide this myself and would be interested in what an experienced P2P investor would do

I'm me with my own risk tolerance and needs (like age and such) so it's not that useful for you. I suggest that you decide on your risk tolerance then:

1. If cautious, limit yourself to 5% of investable money per platform.
2. If average-to high, limit yourself to 10% of investable money per platform
3. If speculative, limit to between 15% and 25%, with 15% being the safer end unless the returns are really so much higher that it's worth the extra concentration risk.

On each platform it's quite common to suggest spreading the money so that no more than 0.5% is with any one end borrower. Those with higher risk tolerance can go above that if they think the returns are worth it.

Almost all of my P2P investing is at 12%+ yield before bad debt.

At the moment about 15% of my investable money is in P2P. That's limited by how much of the money is in pension, ISA and VCT tax wrappers and it includes my whole stooze pot. If I exclude money in tax wrappers, P2P is around 90%. I expect this to increase substantially once the Innovative Finance ISA is available and when I find a SIPP with charges that look reasonable for the P2P I want to do and which has a suitably broad range of P2P options. If those were available today I'd be at over 50% in P2P.

At the moment I'm limited by how much money I have available for opportunities that look good and the relative attractiveness of tax wrappers like VCT, SIPP and ISA vs unwrapped P2P.

1977janner

Hi I have PM'd you
Regards

MrOverheads

rwgray wrote: »

Still small enough for the rates to be incredibly attractive, still new enough for the defaults not to be off-putting... although I am moving towards SavingStream just lately.

Rich.x

Intersting that you makes that comment about rebs, but then in the second half of the sentence advocate SavingStream.

So what attracts you to SS and what puts you off Rebs?

saintalan

I read Rich.x comments as being supportive. If so I agree with both halves.

I found Rebs to need a liitle more understanding at first.

Alan