Peer-to-peer lending sites: MSE guide discussion

shoi

00ec25 wrote: »

It is vital to understand that Zopa is now a totally different set up to even as recent as the post previous to yours in April 2013.
. . . . . . . . . .
I am a Zopa investor (not a saver) and have been since 2010. I no longer invest new funds in it because the changes mean I have no control over what rates I am trying to get.

But you don't have to accept their guarantee system, you can carry on as before (as I have)

shoi

Nuncle wrote: »

What dawned on me is, once everything's taken into account, tax and bad debts, what rate of return should I be looking to get? For any savings or investment it should be above the rate of inflation, but by how much? My investment isn't protected, so if Zopa goes under I might lose the lot. I can put a lump sum away for 3 years in an ISA and get 3%. The shortest loans are 3 years also, and using my current offer rates I get a real rate of return of 3.1% for shorter terms, and 4% on longer. .

But whatever the term of the loan you get repayments every month, so it's not as if the money is all locked away for 3 years, it gets repaid in installments
And the key point, if Zopa goes under, the borrower still owes you the money and there is a system in place, not relying on funding from Zopa to make sure they repay. (To confuse matters, there are two alternative systems in place see my post directly above)
My experience has been good.

00ec25

shoi wrote: »

But you don't have to accept their guarantee system, you can carry on as before (as I have)

agreed
but the fact remains over time non safeguard investors will be squeezed out. I'll take as read you have seen the comments about this on the Zopa forum

as for my own experience, the safeguard offers have, so far, seen my money fly out in hours at 0.1 - 0.3% rates higher than the "old" zopa "POPA" at which, because of my position in the queue, nothing had moved for weeks.

agent69

I've been into P2P lending for about 6 months.

I put a bit in Zopa, but haven't made any contributions lately as the rates are too low. I'm still putting money into funding circle, but concentrating on the larger asset secured loans (on the assumption that the affect of bad debts will be less).

I've just signed up to Thin Cats (haven't invested any money yet) to see what is on offer. The rates appear better than elsewhere, but you have to put at leat £1000 into any given loan.

Does anyone have any experience of Thin Cats, and if so, how do you get over the "all you eggs in one basket" scenario?

grey_gym_sock

RichardLuxmore wrote: »

Agent69, why don't you try something completely new. For example FundingSecure.

RichardLuxmore's profile says:

Co-Founder of Funding Secure

and this site's rules say you shouldn't be posting to promote your business. (especially duplicating it in 2 different threads.)

quotememiserable

agent69 wrote: »

Does anyone have any experience of Thin Cats, and if so, how do you get over the "all you eggs in one basket" scenario?

I use it and its easily the most professional P2P. There are two ways to avoid eggs in one basket. a) put in £20k plus with £1000 into any one loan. b) Use the 'thin cats lending club'. You can put £1000 into those and it gets spread around the loans as they go through.

waiax73

are the P2P lending sites regulated by the FSA/FCA? what happens if someone decides not to pay back the loan?

Sorry but I am a complete newbie to this

quotememiserable

waiax73 wrote: »

are the P2P lending sites regulated by the FSA/FCA? what happens if someone decides not to pay back the loan?

They aren't regulated now, but its coming. After that returns will fall because regulation is sure to bring in extra cost, and probably do very little for security - after all, the banks were regulated.
If the borrower defaults then you stand to lose some capital, because you are the lender. That's the risk that means you can get maybe 8% returns - with no risk at all you can only get about 2%.
However, how much you lose would depend on a few things. If its an amortised loan and it gets to half way through before it fails, then you've got half your capital back already. If its a ThinCats one then there will normally be some security as well - eg some business assets to be sold and repay investors. Funding Circle and Zopa are unsecured, I understand.
This is also why you should spread you loan book over many borrowers, so that if one fails its only a small proportion of your investment.

robatwork

I have just "got" why thin cats is so called!

Nothing to add to the thread, just thought you should know.

quotememiserable

Well done Robatwork, you get a point.