Peer-to-peer lending sites: MSE guide discussion

bowlhead99

taylornj wrote: »

Think there is a slight typo - should that 11% be 12%.

He's saying (I think) that if you invested on a 12% interest rate opportunity and decided to get out early after eleven months (e.g. with a month to go on the loan and no obvious defaults) you would still basically have got your 11% (11/12ths of what you'd have got if holding for the full term). If you were using one of the 'good' platforms.

Whereas with ratesetter who are not as transparent, they would be taking a fee, and they would also be saying, hey it looks like you only did eleven months which is less than what you signed up for - so we can't give you 11/12ths of the annual rate you wanted, we'll adjust it to give you eleven lots of whatever the monthly rate is on the monthly term market (which is lower than the 1 year term market).

taylornj

See that now 11% for 11 months. I have to be more careful reading.

jamesd

Yes, that's right, eleven months to avoid twelve months and the one year rate at RateSetter.

Both Zopa and RateSetter are fine firms and I'd be happy to use either if the combination of rates and features seemed to make sense. It just doesn't seem so at the moment. And I've definitely been spoiled to some extent by the great ease and nil cost of getting money out of MoneyThing, though getting it reinvested is slower. Not horribly slow, when the last new loan was around I reinvested about £11k over a couple of days in other ones and could have done a lot more if I was paying more regular attention. A while before that I'd had to sell a couple of tens of k over an hour or so to liquidate funds to meet a commitment elsewhere.

No guarantee that this will always be true but it's quite nice while it's around. If buyers did evaporate it's quite common to have loans with six months or a year of term paying eleven or twelve percent so you can control your expected lock-in duration that way as well if you like. And of course the option to buy loans ending in days or months on the secondary markets.

Similar at Ablrate but in reverse: easy to get invested via the secondary market and usually uncapped initial loan issuing but a bit slower to sell.

bigadaj

jamesd wrote: »

Yes, that's right, eleven months to avoid twelve months and the one year rate at RateSetter.

Both Zopa and RateSetter are fine firms and I'd be happy to use either if the combination of rates and features seemed to make sense. It just doesn't seem so at the moment. And I've definitely been spoiled to some extent by the great ease and nil cost of getting money out of MoneyThing, though getting it reinvested is slower. Not horribly slow, when the last new loan was around I reinvested about £11k over a couple of days in other ones and could have done a lot more if I was paying more regular attention. A while before that I'd had to sell a couple of tens of k over an hour or so to liquidate funds to meet a commitment elsewhere.

No guarantee that this will always be true but it's quite nice while it's around. If buyers did evaporate it's quite common to have loans with six months or a year of term paying eleven or twelve percent so you can control your expected lock-in duration that way as well if you like. And of course the option to buy loans ending in days or months on the secondary markets.

Similar at Ablrate but in reverse: easy to get invested via the secondary market and usually uncapped initial loan issuing but a bit slower to sell.

James did you get any of the recent small generator secured loan?

jamesd

No, and that one went so fast that they are having some thinking about how to deal with it, particularly the obvious fact that none of the investors read the documents before investing, because there wasn't enough time to do that between opening and filling. They don't want caps either, so they have an interesting problem.

That one won't draw down until the charge by another lender has been removed. It's for an invoice finance firm that would have been used if the Ablrate deal hadn't worked but it bars the offering of security that the Ablrate deal needs.

takesyourchances

Just a general question to those of you invested in P2P, I read some of you are also wondering about balancing out investnents.

My P2P is heading towards 10K now, between Ratesetter, Funding Circle and a small amount in Zopa and recently adding to Collateral, Moneything and just opening Abriate.

At the moment I am letting my Ratesetter, Zopa and Funding Circle amounts sit and trying to build up new loans across Collateral, Moneything and Abriate as they come up and some SM along the way, these are more hands on than the others, but I actually enjoy these platforms too as the loans come up.

I guess the general question is how would your P2P compare to your S&S ISA etc, are you investing more into P2P at the moment or an even balance or a smaller amount?

My P2P is slowing growing and I have much more in my S&S ISA that I am adding to also, but I want to continue to add and build up Collateral, MT and Abrate more as they are slower to get added too, but I am willing to put the time in and add to these.

How high are you willing to invest in P2P etc compared to other investments?

I found myself jumping from around 5K to towards 10K quicker than I thought, but I am understanding the platforms more now and learning as well so interested in thoughts from others doing similar.

Thanks

TheShape

bigadaj wrote: »

James did you get any of the recent small generator secured loan?

I managed to get a small amount invested in the generator loan but only because I made sure to get to lunch just before noon that day. Four minutes later and I would have missed out. Interested to read the update from jamesd in the post below yours.

TheShape

takesyourchances wrote: »

Just a general question to those of you invested in P2P, I read some of you are also wondering about balancing out investnents.

How high are you willing to invest in P2P etc compared to other investments?

I found myself jumping from around 5K to towards 10K quicker than I thought, but I am understanding the platforms more now and learning as well so interested in thoughts from others doing similar.

Thanks

I'm very much a small investor so my numbers are small overall.

At the point where my S&S ISA had a value of approx £12k and p2p £5k I decided to aim for a roughly 2:1 ratio between the two going forward.

That hasn't happened. My p2p investment has grown to approx £10.5k as a number of opportunities to invest have been available over the last month. I've managed to remain diversified across a number of loans and platforms but if I'm honest, I find p2p a little addictive so am having to be careful not to invest too heavily. I have a regular deposit to my S&S ISA restarting this month so that will help.

takesyourchances

TheShape wrote: »

I'm very much a small investor so my numbers are small overall.

At the point where my S&S ISA had a value of approx £12k and p2p £5k I decided to aim for a roughly 2:1 ratio between the two going forward.

That hasn't happened. My p2p investment has grown to approx £10.5k as a number of opportunities to invest have been available over the last month. I've managed to remain diversified across a number of loans and platforms but if I'm honest, I find p2p a little addictive so am having to be careful not to invest too heavily. I have a regular deposit to my S&S ISA restarting this month so that will help.

Quite similar to myself, from signing up to the 3 higher rate platforms I have the opportunities have been good lately and trying to catch them to build those up.

I am happy to continue to add new money to up coming loans as they arise and continue to build beyond the 10K in P2P but I am still maintaining my monthly payments to my S&S ISA and SIPP and have a cash buffer, I lowered it a bit into P2P as I was a bit cash heavy still, so I directed some of that into my recent P2P buy's.

I can see what you mean by it being a little addictive as getting them built up as been as well, I'm remaining conscious of other investments still, but I feel as long as your investments are spread out and you have a cash buffer as well, P2P is an interesting add on.

I will let Ratesetter and Funding Circle and Zopa sit as they are for the moment as they are hands off and look to add to the fresh loans across Collateral, MT and Abrite, which I will try and get some more into.

Thanks for your reply and seems very similar to me as well.

Biggles

takesyourchances wrote: »

I guess the general question is how would your P2P compare to your S&S ISA etc, are you investing more into P2P at the moment or an even balance or a smaller amount?

A valid question but one that doesn't concern me too much yet, as my S&S investments go back decades and my P2P is a relatively recent animal. It won't be much help, but my ratios are roughly:-

S&S............50%
Buy To Let.....42%
Bank a/cs.......3%
P2P.............5%

P2P increases slightly as funds become free