P2P lending - where's best?

p2pinvestor

jamesd wrote: »

An interesting choice of options given that none of them is most favoured by the people answering polls over at the P2P Independent Forum. More research may be beneficial. Also, three platforms would give too high a loss if there was a very large loss due to fraud at one platform. Best to consider five different platforms if the amounts of money involved are enough to allow a thousand or more at each. Such diversification also makes it much easier to invest as much as desire at some of the higher paying platforms with more limited loan supply.

Are you aware of the 'favoured' platforms? Looking for property backed asset security, low LTV. I am after a suitable p2p platform/loan in which I can invest pension fund (SSAS) monies. Has to be a loan for commercial purposes and has no residential connection.

Would appreciate any knowledge on the above willing to be shared.

bigadaj

Savingstream advertise the ssas possibility so might be worth looking at. They are property asset backed, depends what you mean by a low ltv, but their offerings seem to run from 35-70% of the valuation.

Many offerings just seem to be through one platform, which obviously concentrates risk even if spread across different loans and borrowers.

george4064

Article in the Your Money section of today's Telegraph about P2P, quoting a comparison/research website called https://www.4thway.co.uk

Looks quite useful from what I've read so far..

george4064

I'm getting quite frustrated with P2P, I currently don't have any money in P2P.

I have a very thorough understanding of how investments (stocks, shares, ITs, UTs) work however this is not the same for P2P, and that is whats frustrating me especially as I'm looking to move some cash to P2P (at the moment I currently feel more comfortable investing in a fixed income IT such as HDIV than P2P!)

Does anyone have or know of a good overview document of the P2P market? Including information such as their various risks (e.g. asset backed, non-asset backed, P2B/P2P, default rates), charges, re-investment process and withdrawal process.

eskbanker

george4064 wrote: »

Does anyone have or know of a good overview document of the P2P market? Including information such as their various risks (e.g. asset backed, non-asset backed, P2B/P2P, default rates), charges, re-investment process and withdrawal process.

I must admit that it's not an area I feel I know enough about yet too, but would assume that sites like http://www.p2pmoney.co.uk/ and http://p2pindependentforum.com/ should be a reasonable starting point, in terms of resources, analysis and discussions, for those who've progressed beyond the complete beginner's guide at http://www.moneysavingexpert.com/savings/peer-to-peer-lending....

nushnush

your interest is paid on the first day of each month
negative days is just that the loan has overrun but nothing much to worry about so long as the LTV can easily cover a default, many loans of this type run beyond the expected repay date but so long as the borrower pays interest upfront then its usually not a problem,
the time ticks down from the day the loan becomes live.
people still buy negative days loans because people sell them in the belief that they are at more risk of default than any other loan, thats not really true but if they do default then you might be waiting longer for a return so having loans with a number of days remaining helps to keep your assets more liquid.

bigadaj

nushnush wrote: »

your interest is paid on the first day of each month
negative days is just that the loan has overrun but nothing much to worry about so long as the LTV can easily cover a default, many loans of this type run beyond the expected repay date but so long as the borrower pays interest upfront then its usually not a problem,
the time ticks down from the day the loan becomes live.
people still buy negative days loans because people sell them in the belief that they are at more risk of default than any other loan, thats not really true but if they do default then you might be waiting longer for a return so having loans with a number of days remaining helps to keep your assets more liquid.

I wouldn't totally agree with the negative days comment, this is one of the poorer aspects of Savingstream in my opinion. It effectively gives the impression of a mini default, I've only noticed that one of their loans has gone into full default but it still looks poor. Why not adopt the Moneything option of rolling over for a defined period, the demand currently hugely outstrips supply and it would give everyone more confidence.

My opinion will obviously vary from others but teh providers could learn from each other. Money thing is very good, but their limited time period for investment and crediting is annoying, the Savingstream model of pre funding is an improvement. Also bank transfers can take time to be credited, Ablrate allow an immediate debit card payment for example.

Saving streams clarity of information and due diligence has been questioned though. Defaults on all these platforms have been low and there is security to allow repayment after due process of course.

nushnush

i would be interested to know what part of the negative days section you dont agree with, im not wanting a full guns blazing thing, just interested thats all
and i would agree these sites could all lean a bit from each other

Trentenders

nushnush wrote: »

i would be interested to know what part of the negative days section you dont agree with, im not wanting a full guns blazing thing, just interested thats all
and i would agree these sites could all lean a bit from each other

The borrower pays interest for the term up front, so there is very little chance of default prior to that (i.e. Savingstream don't need to ask for any payments until term - a company could go into administration, or the borrower could die, etc. but there won't be any late/missed payments to Savingstream).

Once you're into negative territory, it's often less than clear how interest is being serviced. I suspect that many pay on a month-by-month basis.

It is very common for bridging finance to overrun. Absolutely no problem with that, so long as communications are clear. All other things being equal, those loans that are approaching term/negative are inherently more risky.

The secondary market makes for a credible plan to get out before Savingstream test their client by asking for additional interest payments. You can't rely on it to always remain as liquid as it has been in recent times, but it's a fantastic tool for now.

bigadaj

nushnush wrote: »

i would be interested to know what part of the negative days section you dont agree with, im not wanting a full guns blazing thing, just interested thats all
and i would agree these sites could all lean a bit from each other

Well simplistically it just looks bad.

It gives the appearance of a mini default, other platforms have the opportunity to rollover funds and that is a more transparent and honest approach in my opinion.

Savingstream treat this as a secondary market, but for example the garden centre loan that defaulted was still being listed for purchase weeks or months after it was accepted the loan wasn't going to be repaid.

I know some people have totally discounted Savingstream for further monies and sold out their loans, I've a small amount with them and will selectively invest further but take extra care and wary of overdue loans on the secondary market.

Being harsh you are offering to buy a loan at par, when the borrower has already failed to meet his commitments; the likely outcomes are that it is settled in the near future, meaning the quantum of the interest is low, or ot goes into default meaning you are looking at a wait for your money and a potential haircut.