Peer to peer loosing

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Hi,

After reading another thread on peer to peer lending, I've joined an other site, not invested yet.

The site in question is saving stream.

Reading the advertising pitch about Having a fund ( can't remember their term for it) basically to really any bad debt, so the lender doesn't loose out.

Has anyone actually lost money through a bad loan on here, I've read the news paper stories, but not ever spoke to any one has lost out.

Don't need to know how much you lost and all that, I'm just interested if they really do pay out like they say the fund is for.

Thanks
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  • coyrls
    coyrls Posts: 2,438 Forumite
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    This might sound brutal but if you're not able to make the risk assessment yourself, I would steer clear. Getting random responses on a forum from people who may or may not have lost money is not a good way of assessing risk.
  • gt94sss2
    gt94sss2 Posts: 5,673 Forumite
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    edited 16 February 2016 at 1:29PM
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    Have a look at http://p2pindependentforum.com/

    If you invest in any P2P firm you have to accept that your money is not protected by the FSCS - and that you can potentially lose it all.

    Some P2P sites do have a provision fund - like Savings Stream - and so far no one has lost money with SS but there is no guarantee this will never happen.

    SS have so far never had to pay out any money from their provision fund. Like most p2p firms they are relatively new. They have only had one loan 'go bad' and were able to sell the asset for more than the value of the loan. This may not always be the case.

    (note I have lost money with some p2p investments but not [yet!] with Savings Stream)
  • Dan83
    Dan83 Posts: 672 Forumite
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    Did the p2p site have a provision fund, and if so did you get your money back?

    There doesn't seem to be many loans for investors to buy on saving stream, is that because of the high interest rate, everything gets snapped up in no time?
  • Kendall80
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    Dan83 wrote: »
    Did the p2p site have a provision fund, and if so did you get your money back?

    There doesn't seem to be many loans for investors to buy on saving stream, is that because of the high interest rate, everything gets snapped up in no time?


    When you go to the available loans page that is essentially their secondary market. You can use their pre-funding utility for loans that are about to come online. They have 4 coming online tomorrow morning - i've adjusted my pre-funding level for these. I believe this guarantees smaller investors a certain proportion but as always you'll need to do your own research.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    Just days ago a grand panjandrum, Adair Turner, was forecasting big losses for P2P. I've always had the impression that he's an !!!, but that doesn't necessarily mean he's always wrong.

    http://www.theguardian.com/money/2016/feb/10/former-city-regulator-warns-peer-to-peer-lending-lord-turner
    Free the dunston one next time too.
  • kidmugsy
    kidmugsy Posts: 12,709 Forumite
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    Alas, MSE's censor software must be American because it's censored a word that over here means a donkey but over there means a back botty. Come on, MSE, can we please have British censorship (or even better, none at all)?
    Free the dunston one next time too.
  • redux
    redux Posts: 22,976 Forumite
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    kidmugsy wrote: »
    Alas, MSE's censor software must be American because it's censored a word that over here means a donkey but over there means a back botty. Come on, MSE, can we please have British censorship (or even better, none at all)?

    Not much chance of any response to requests like that. The forum is still censoring acute accents, such as appear in French and other languages, and thus in words adopted into English, like fianc! and clich!.
  • Rich2808
    Rich2808 Posts: 1,332 Forumite
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    There is no FSCS protection - so you could lose all your money.

    It's been a good deal since peer to peer came into prominence in the last five years - but that's been a period of rising growth.

    What happens if we go into a recession and the borrowers cannot repay.

    If you are happy with the risk fine - but it's not for everyone.

    And the rates aren't all that - in some cases barely more than I get on my current accounts which are protected and instant access.
  • redux
    redux Posts: 22,976 Forumite
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    kidmugsy wrote: »
    Just days ago a grand panjandrum, Adair Turner, was forecasting big losses for P2P. I've always had the impression that he's an !!!, but that doesn't necessarily mean he's always wrong.

    http://www.theguardian.com/money/2016/feb/10/former-city-regulator-warns-peer-to-peer-lending-lord-turner

    The picture does seem to have some similarities with collateralised debt that got the banks into problems a few years ago, except that the platforms doing this now have less protection than banks.
  • bowlhead99
    bowlhead99 Posts: 12,295 Forumite
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    edited 16 February 2016 at 2:20PM
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    redux wrote: »
    Not much chance of any response to requests like that. The forum is still censoring acute accents, such as appear in French and other languages, and thus in words adopted into English, like fianc! and clich!.

    Yes, and I'm sure the residents of the North Lincolnshire town of S!!!!horpe are rather less pleased about it than those living in Cockfosters.

    Dunno what kind of ignorant as smaster came up with that.

    Back on topic, I haven't done much peer to peer lending as your money should be spread widely but the deals with good rates will be ones requiring the most thought, as such I wouldn't want to "auto lend" but don't have the time to scrutinize £50 investments here and there to deploy a couple of grand.

    Seems more straightforward to lend to individuals who just want an unsecured loan and are scared of going bankrupt and getting bad marks on their credit score, than to viably do due diligence on the asset backing of a corporate entity's business plan when you only want to give them a few hundred quid. However, rates for consumer-to-consumer lending are a bit crap, as people with reasonable creditworthiness can go to Tesco or Sainsbury or Nationwide at 3.5%, so not a lot of money for a lender to make in those IMHO once the platform takes their slice and the bad debt fund takes its slice.
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