Peer to Peer Lending- some advise please?

Jonbvn

N1AK wrote: »

The biggest single issue which I think has negatively impacted my returns is that I use autobid, and you can't tell autobid not to buy up loans other lenders want to sell. I know that some lenders track their loans and if they see anything funny then they'll sell them off before FundingCircle downgrades the debt. Us poor !!!!!!s on autobid cannot avoid buying up those loans. Effectively it is a subsidy for active investors by auto-investors; and one I am no longer willing to support, which is why I don't do any new lending on that platform.

Autobid on FC is a complete no-no. To make a good return on FC requires a lot of effort, undertaking due diligence and playing the secondary market. It is not a "fire & forget" deal.

IMHO, you may be better off with ZOPA or RS, both of which take much less effort to make a 5%+ return.

Jonbvn

arbster wrote: »

That's a significant commitment to P2P lending - do you use other sites too, or just Funding Circle?

One of the largest risks with P2P & B is platform failure. Therefore, it is wise to spread your money around several platforms. Of course some platforms offer higher risk lending than others, and you should consider spreading your funds accordingly.

N1AK

Jonbvn wrote: »

Autobid on FC is a complete no-no. To make a good return on FC requires a lot of effort, undertaking due diligence and playing the secondary market. It is not a "fire & forget" deal.

IMHO, you may be better off with ZOPA or RS, both of which take much less effort to make a 5%+ return.

I'm inclined to agree, which is why I've moved my new investing to Ratesetter. 6.5% with no effort appeals to me a lot more than trying to micromanage hundreds of loans for £20-£50 for maybe 8% return.

arbster

Jonbvn wrote: »

Autobid on FC is a complete no-no. To make a good return on FC requires a lot of effort, undertaking due diligence and playing the secondary market. It is not a "fire & forget" deal.

Agreed - I had Autobid on for a short while and found that it bid at much lower rates than could be achieved by manually bidding, and I couldn't seem to find a set of values that did what I wanted. The buying up of rubbish loan parts on the secondary market is another good reason to avoid it.

Jonbvn wrote: »

One of the largest risks with P2P & B is platform failure. Therefore, it is wise to spread your money around several platforms. Of course some platforms offer higher risk lending than others, and you should consider spreading your funds accordingly.

I'll definitely look at Ratesetter to spread the risk, but the recent funding round and British Business Bank programme "endorsement" of Funding Circle give me more confidence in it as a platform. Also, the fact that the risk is passed back to the lenders surely means that the chance of platform failure is further reduced? Something of a double-edged sword, for sure.

agent69

Jonbvn wrote: »

One of the largest risks with P2P & B is platform failure.

Do you have any facts to support this? Is there any available information showing how much has been lost to platform failure compared to losses caused by defaults?

Don't forget that platform failure does not necessarily mean a loss on investments. With most P2P loans the agreement between you and the borrower remains in place even if the platform goes pop

Jonbvn

agent69 wrote: »

Do you have any facts to support this? Is there any available information showing how much has been lost to platform failure compared to losses caused by defaults?

Don't forget that platform failure does not necessarily mean a loss on investments. With most P2P loans the agreement between you and the borrower remains in place even if the platform goes pop

There are no "facts" yet given that P2P market is just too immature ATM. However, this is not just my opinion but that of a relatively large group of lenders and P2P platform companies as indicated in the links.

http://p2pindependentforum.com/thread/2285/p2p-lending-tips
http://p2pindependentforum.com/thread/2281/wellesley-gurney-lending-experts-tips

I agree your second point in principle. However, how it would actually work in practice has yet to be seen.

agent69

Jonbvn wrote: »

There are no "facts" yet given that P2P market is just too immature ATM. However, this is not just my opinion but that of a relatively large group of lenders and P2P platform companies as indicated in the links.

http://p2pindependentforum.com/thread/2285/p2p-lending-tips
http://p2pindependentforum.com/thread/2281/wellesley-gurney-lending-experts-tips

I agree your second point in principle. However, how it would actually work in practice has yet to be seen.

The2 links refer to 30 world class experts giving advice to new investors (top 2 tips were diversify and do your homework, Think I could have worked that one out for myself).

Your view is that "One of the largest risks with P2P & B is platform failure.". Now you are saying this is supported by "a relatively large group of lenders and P2P platform companies". Are you seriously suggesting that the P2P companies are all saying that there is a large risk of them going bust?

The 2 articles do not appear to offer much comment on the risk of platform failure. While there obviously is a risk, I don't personally have it at the top of my worry list. If the platforms were inherently weak then the government and institutional investors wouldn't be lining up to get on the band wagon.

While the likes of Funding Circle are losing money at a rate of knots (circa £10m last year?), I can't see them going pop anytime soon.

TheTracker

N1AK wrote: »

I'm inclined to agree, which is why I've moved my new investing to Ratesetter. 6.5% with no effort appeals to me a lot more than trying to micromanage hundreds of loans for £20-£50 for maybe 8% return.

My view is you only need about 40-50 secured loans for diversity. If you have even 20-30k+ to invest I'd recommend looking at some of the higher entry platforms (TC requires 1k+ per loan) and you can be managing just dozens of loans for 9%+ return.

Jonbvn

agent69 wrote: »

Your view is that "One of the largest risks with P2P & B is platform failure.". Now you are saying this is supported by "a relatively large group of lenders and P2P platform companies". Are you seriously suggesting that the P2P companies are all saying that there is a large risk of them going bust?

So why are said companies recommending to diversify across several platforms?

Please remember that P2P is still a very immature market and has not been through a full economic cycle yet. I did not say there is a large risk of anyone going bust. What I said was that one of the largest risks of P2P is platform failure.

And you come across as very defensive. Why would that be? - Ah I see...From your posting history I see you are a FC fan boy for whatever reason;) Do they pay you?

Thrugelmir

agent69 wrote: »

While the likes of Funding Circle are losing money at a rate of knots (circa £10m last year?), I can't see them going pop anytime soon.

Raised $150 million from investors last month, investors included Blackrock and Bailie Gifford. With the Company valued at a $1 billion. A £10m loss has been allowed for. Start-up's burn cash.