Peer-to-peer lending sites: MSE guide discussion

C_Mababejive

Just a question about Funding Circle...why do people buy and sell loan parts? Are there advantages in buying/selling a loan part at a critical time?

MarkFromCornwall

C_Mababejive wrote: »

Just a question about Funding Circle...why do people buy and sell loan parts? Are there advantages in buying/selling a loan part at a critical time?

Sell because you need the cash.
Sell because you think a company looks at risk of defaulting.
Sell because you find a better investment.
Sell because you only bought the loan part to get the cashback that's offered on some loans.
Buy because you weren't around when the loan was originally auctioned.
Buy because a loan part looks a better investment than any of the loans currently being auctioned.
Buy to increase the diversification of your loan portfolio.

agent69

FC loans generally don't have security and the view is often that the risk of default increases disproportionately the longer you own the loan part (see the sell after 6 months thread on the independent forum).

Lots of people only want to hold loans for short periods before selling them on.

C_Mababejive

Thanks Mark & Agent... I had considered all the reasons in both posts but thought i had missed something. Nevertheless it adds clarity to the situation. I'll go have a further look..

By the way,if you throw some loan parts on the sell pile, do they get picked up by others looking to buy on autolend or do people actually have to actively buy them? Im guessing the latter?

rwgray

https://www.savingstream.co.uk/documents/newstructure.pdf

New lending model in place for Saving Stream based on true p2p: we lend our money to the borrowing company, not to SS first.

Progress...

Rich.x

arbster

C_Mababejive wrote: »

By the way,if you throw some loan parts on the sell pile, do they get picked up by others looking to buy on autolend or do people actually have to actively buy them? Im guessing the latter?

Autobid will also buy loan parts that are listed at par or at a discount, if they meet investors' minimum interest rate criteria for the risk band.

DiggerUK

I have trawled through a little short of twenty platforms, they all deal in loan swaps of one sort or another.
They lend money out, then sell the debts on to lenders, some of those lenders post here.

No wonder the FSCS won't touch them. The risk assessment that has to be gone through by their rules, means that loans could not be made to those who receive them via the P2P platforms.
The government money that has gone to assist P2P platforms seems, to this cynic, a bit like the few words attached to bill boards outside theatres, and on the cover of new books.......worthless.
So by one smart move, the government gets money pulsing through the economy.........and in to the cash starved SME (small and medium enterprises) section of the economy, at no risk to the government. Smart move by the government or what!

Loan swaps, collateralised or not, with [STRIKE]AIG[/STRIKE] security.....ring any bells..._

bigadaj

DiggerUK wrote: »

I have trawled through a little short of twenty platforms, they all deal in loan swaps of one sort or another.
They lend money out, then sell the debts on to lenders, some of those lenders post here.

No wonder the FSCS won't touch them. The risk assessment that has to be gone through by their rules, means that loans could not be made to those who receive them via the P2P platforms.
The government money that has gone to assist P2P platforms seems, to this cynic, a bit like the few words attached to bill boards outside theatres, and on the cover of new books.......worthless.
So by one smart move, the government gets money pulsing through the economy.........and in to the cash starved SME (small and medium enterprises) section of the economy, at no risk to the government. Smart move by the government or what!

Loan swaps, collateralised or not, with [STRIKE]AIG[/STRIKE] security.....ring any bells..._

But you're happy hoarding your gold, if others want to take on more risk then that's up to them.

Do you read the daily mail?

caveman38

When you pick a few P2P lenders to deal with say RS, SS, Zopa and FC in my case. Because of the little information I can glean from the sites I am unaware of how my funds are lent out. By that I mean if I was to deposit a £1,000 at each, can I select £100 to lend to different borrowers to limit defaults. And make 10 different trades for each or are their platforms set up completely different that may only allow lends to be made without knowing the borrowers.
Can someone help with this - assuming you can understand my Q

saintalan

Normall the P2P company is your a/c where you deposit funds. You then select the amount you want to invest in each opportunity.