Peer-to-peer lending sites: MSE guide discussion

bigadaj

DiggerUK wrote: »

This thread is about p2p, try and stay on topic. I am posting to discuss p2p, I suggest you do the same.

Alternative ways of putting cash by are the subject of many other threads..._

Not good nough unfortunately, just being negative is a poor approach, you have a certain amount of cash and assets and sensibly allocate that between asset classes.

No one is advocating sticking the whole of their wealth in p2p, typical allocation might be 5-10% of liquid assets at most, and that split between several platforms and many loans.

Constantly moaning isn't constructive particularly when you aren't aware of the actual specific details, slating all providers is no different to stating all banks are the same, all equity investments etc etc

bigadaj

caveman38 wrote: »

I have to confess that I have entered the world of P2P blinkered. I lent some money on a 3 yr. market at 5.5% and now realise if I want my money after 3 years I have to re-invest each month in the yearly market and in the final year the monthly one.
I am no maths genius and have roughly worked out that if the yearly rate is 4% and the monthly 3.5%. My final return only works out at 4%.
Am I correct as I would have been better off (time wise) sticking to the yearly market and re-investing a similar product in 12 months.

Probably.

My problem with the big p2p platforms is that the actual returns aren't sufficiently high to mitigate my perception of the potential risks.

The sort of returns you're quoting are barely better than cash in current accounts, with the associated inflexibility and risk ain't attractive

Some platforms are offering double digit returns, with some risk obviously but frequently asset backed.

Thrugelmir

caveman38 wrote: »

I am no maths genius and have roughly worked out that if the yearly rate is 4% and the monthly 3.5%. My final return only works out at 4%.

There's alternative options available to earn a better rate than this with a similar degree of risk.

itm2

I have a couple of P2P lending investments - one with Funding Circle and a rolling 30-day investment with Ratesetter. While the rate of return has been good so far, I haven't got any experience of cashing in.
I was curious to know how long it generally takes to sell and withdraw investments with Ratesetter and Funding Circle - are we talking a couple of weeks, a month, more??

Futuristic

agent69 wrote: »

25% of your £3k went to one borrower. Doesn't sound very diverse. Is there anything stopping it all ending up at one place?


I guess Wellesley are a bit like RS, not certain what happens if you want all your money back early - on RS there can be quite a hefty penalty depending on timing.

The biggest investment (25% ~£750) has now dropped, with highest being £114.63

mandywr

I was probably very naive. I have been lending on Thincats. I thought the cost of legal action to enforce a debt would be born by the P2P company or the "sponsor" who vouched for the security offered. It turns out I was wrong.
It is worth checking when lending on these P2P platforms,
1. to whom the money is actually owed and
2. who is responsible for enforcement action

TheTracker

mandywr wrote: »

I was probably very naive. I have been lending on Thincats. I thought the cost of legal action to enforce a debt would be born by the P2P company or the "sponsor" who vouched for the security offered. It turns out I was wrong.
It is worth checking when lending on these P2P platforms,
1. to whom the money is actually owed and
2. who is responsible for enforcement action

I thought the TC Ts&Cs were fairly clear about risk management and "fighting fund" enforcement responsibilities and very clear that there is no provision fund as seen on other platforms.

Personally, one of the reasons I like TC is that there are no provision funds and that the lender has such open views of any security under the loan. Inevitably though that means when loans go sour the lender syndicates are exposed to decisions around recovery actions and differences of opinion will emerge (I note yours on the TC forum thread).

All that isn't to say the terms could be made clearer still, and work remains on the sponsor front in my opinion. I have the optimistic hope that through experiences and input such as yours the platforms will refine their recovery processes.

But yes to agree strongly, on P2P platforms the Ts&Cs are very important and you must read and understand them.

agent69

A salutary tale on the possible pitfalls of P2P lending.

http://p2pindependentforum.com/thread/3790/watch-retailer-goes-before-payment?page=1

TheTracker

That's a shame. I tend to expect between 1 in 10 and 1 in 50 of my loans will write off half the initial capital per annum. This is a very conservative estimate based on default rates on many platforms. I tend not to worry about it too much - the market rates will adjust to match the risk or the viability of p2p will fade. The real concern is one of perception, where the visibility creates scare stories.

feefy88

I'm thinking of lending money to a peer-to-peer lending company wellesey (with an ipad in return). However, before I do this, I'm most concerned of how the credit checks they run to accept me lending the money (soft checks I'm told), may influence the stringent checks that I will undergo when I take out a mortgage in the next year or so.

Has anyone got any information regarding this?

I was thinking as there's no guarantee your money that you invest is protected, mortgage lenders may think that I take risks with my money??