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Peer-to-peer lending sites: MSE guide discussion
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In effect matched means, the money you've invested as a lender has been contractually assigned to a borrower at the rate you've specified.'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB0
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OK, Not sure whether this is the right place to post, but it seems to be the most appropriate.
I dipped my toes into the P2P market a few months ago, and chose the ZOPA Classic option as it seemed the best of the cowardy-custard 'protected' options.
So far I'm pretty happy with the returns I'm getting, so I'm contemplating upping my game and going for ZOPA Plus.
As things stand I'm compounding my interest by reinvesting my earnings back into my Classic account, but I'm thinking of instead investing those returns into Plus.
Is anyone out there doing that, and if so, how is it working for you ?
The alternative I'm looking at is to spread the risk by going to a.n.other (UK registered) P2P lender - any recommendations out there ?Gus.0 -
Ablrate and MoneyThing are the two I recommend for beginners. Both seem to have excellent ethics and capable people. Easier to quickly get invested at Ablrate because their secondary market allows variable pricing to tempt people to sell. Check the yield to see the effective interest rate you get.0
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Give relatively high equity values I am diverting a portion of investments into P2P so I will start here and then report back where I get to.
I am aiming to mix across a number of platforms, loan types etc.
As a non-UK resident I'm restricted from some sites (Zopa, Ratesetter etc) but most seem to be more flexible (not exactly sure why this is...).
So my UK allocation currently sits in:
- Funding Secure
- Assetz Capital
- BondMason
- Crowdstacker
- Property Moose
- Property Partner
- House Crowd
I also have a number of investment in Euro Platforms including:
- Mintos
- Burgfurst
- Dagobertinvest
In total I have put in a six figure sum.
I am aiming for sites which offer a lot of diversification, either manual (funding secure), or automatic (Bond Mason, Mintos) in the hope that I can limit any downside risk. In fact Mintos allows you to specifiy only those loans with buy back option and Assetz Capital has a provision fund to cover losses (I am invested with their business account).
My only negative feedback so far was in respect of HouseCrowd who I believe are offering misleading investment. They offer properties with assured tennants from a "large corporate client" for 5 years which on the face of it means excellent returns and security. However, dig into the loan documents and you see that the properties then receive a commercial valuation which is some 50-60% higher than a retail valuation. This means that unless they can find a similar assured tennant at the end of the 5 year terms money will be lost. I think its a fairly major flaw. They are within their rights as its in their materials - but totally misleading as its not in the headlines.
I'll report back as things develop.Money won't buy you happiness....but I have never been in a situation where more money made things worse!0 -
For those that may have missed it, the January Ratesetter update detailed a change in the way the provision fund works.
Previously if the PF couldn't cover bad debts then the platform effectively closed down. The new proposal allows RS to raid your account and take interest and capital back to cover the PF shortfall.
Those who are unhappy with the new system can get their money out fee free before the end of the month.0 -
That's an excellent opportunity to exit RateSetter without their usual possibly high fees and move to somewhere that pays more! Do it fast before too many people notice, in case there's not enough supply of new money to buy what you're selling before the end of the month.0
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Im a peer to peer novice and looking for some advise as to whether i should be investing in Ratesetter's rolling or 1 yr market?
The two seem to run at a similar rate but not sure why a borrower would pick one over the other - is it that 1 yr market means a borrower can only borrow for 1 yr maximum, but in rolling it can be anything up to 5 years ?
Thanks in advance0 -
The two seem to run at a similar rate but not sure why a borrower would pick one over the other - is it that 1 yr market means a borrower can only borrow for 1 yr maximum, but in rolling it can be anything up to 5 years ?
A lender investing into the rolling market is stepping in and out of loans with terms of anywhere between 6 months and 5 years. Your capital would normally be returned each month, but in extreme circumstances of low liquidity you could get locked in to the loan contract and your capital would be returned as each underlying loan is paid off by the borrower.
In the 1 year market, you'd be investing in new loans with a 1 year term.0 -
You shouldn't use either, really. Why accept such low interest rates and high sale charges?0
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