P2P lending

Dan83

Hi,
I know the risks of P2P lending,

I've got some money invested in Wellesley & Co, it's pretty much set it up, pay the cash and for get about it, I haven't logged on to my account since the day I set it up, as they do everything,

Anyway now I'd like to dip my toe in the water again, this time with abit more control/better returns.

What are people's experiences with funding circle, I've done the search on here but it brings up all kinds of stuff.

I'm not interested in rate setter as the interest rate is easily beaten with no risks by banks.

Thanks for any replies

Jonbvn

Dan83 wrote: »

Hi,
I know the risks of P2P lending,

I've got some money invested in Wellesley & Co, it's pretty much set it up, pay the cash and for get about it, I haven't logged on to my account since the day I set it up, as they do everything,

Anyway now I'd like to dip my toe in the water again, this time with abit more control/better returns.

What are people's experiences with funding circle, I've done the search on here but it brings up all kinds of stuff.

I'm not interested in rate setter as the interest rate is easily beaten with no risks by banks.

Thanks for any replies

I would suggest you look at http://p2pindependentforum.com/

I would also suggest you have a decent amount of cash in bank savings, before you start investing in P2P.

MarkFromCornwall

Dan83 wrote: »

What are people's experiences with funding circle, I've done the search on here but it brings up all kinds of stuff.

I have a good experience with FC over several years. It's not 'fund and forget' though. To get the best returns you need to regularly look at the loan requests and decide whether they look good and think about the risk versus the return.

P2P is more risky than savings so I'd recommend it should only be a small part of your portfolio of savings and investments.

Mark

bowlhead99

MarkFromMullion wrote: »

I have a good experience with FC over several years. It's not 'fund and forget' though. To get the best returns you need to regularly look at the loan requests and decide whether they look good and think about the risk versus the return.

Sound advice.

As their site notes, "How do I become diversified? Lend to at least 100 businesses and lend no more than 1% to each one".

They have an "easy tool to help you diversify" called Autobid. *They* need to get the money lent out to the borrowers who want it so it's in their interests to help you deploy your cash in small parcels rapidly. But *you* want to only lend money to businesses where you both like the story and like the rate for the risk. Your assessment of the risk, that is.

So you really need to spend time deploying your cash, and then you need to spend time redeploying all the monthly scheduled payments that come back, and you also need to spend time deploying the money that voluntarily got repaid early and didn't get you as many months' worth of interest that you were hoping for the time you spent initially assessing the opportunity.

If you're lending £10k then you can maybe afford for each 'parcel' to be £100 or more. At £1k, is it worth doing all the reading up on 100 £10 parcels? Not for me. So either then you accept just doing a few parcels and maybe have to suffer a material write off, or use an auto match process to get lots of parcels with no real opportunity to filter.

If you like the idea of "getting involved" in your investments and have time to throw at it like a hobby, then there are lots of business funding sites requiring your thought and consideration for each loan and the p2p forum has posters with experience. For that kind of person, you're right, something like ratesetter has rather less appeal.

Full disclosure, my exposure to p2p is zero at the moment.

MarkFromCornwall

bowlhead99 wrote: »

At £1k, is it worth doing all the reading up on 100 £10 parcels?

All good advice, but note that the minimum is £20 not £10.

Mark

SailorSam

Have you read this ?

https://forums.moneysavingexpert.com/discussion/4313323

weenie15

MarkFromMullion wrote: »

All good advice, but note that the minimum is £20 not £10.

Mark

You can purchase loan parts for ~£10 but minimum bid on new loans is £20.

FYI, I've been using FC for nearly 2 years.

Dan83

Thanks for the advice guy, and the links to look at. I've got the obvious bank accounts at there limits interest wise, and just fancied something else, abit more hands on.

I'm not going to have s great deal in my account, probably a few hundred quid, then when my wellasly term ends, I might move that money in.

It'll be treated as fun at first, only more long term then logging in to my will hill account and losing it on a horse/football.

MarkFromCornwall

weenie15 wrote: »

You can purchase loan parts for ~£10 but minimum bid on new loans is £20.

Yes, of course, you're right, I hadn't thought of the secondary market. In fact I've just had a look and found one loan part on offer for a mere £3.67.

Dan83

Can you search by loan length? Lend to companies who want money short term, or buy loan parts with a short term left?

MarkFromCornwall

Dan83 wrote: »

Can you search by loan length? Lend to companies who want money short term, or buy loan parts with a short term left?

Yes, the list of new loan requests can be sorted by term and on the secondary market you can sort by number of repayments left.