IFISA and P2P lending

masonic

eskbanker wrote: »

Personally I'd be surprised if you could move existing P2P investments directly into an ISA once available, based on the need for the Bed & ISA process for shares, i.e. it's only cash that can be taken under the ISA umbrella in any of the existing variants.

In practice it will be even trickier for P2P loans. FCA guidance is that loan parts must be made available on an open market between the sell and the buy. Since demand outstrips supply quite considerably, it will be a race against the clock to buy back the parts before someone else gets them. Should be quite interesting...

the_learner wrote: »

My intention is not to move these P2P investments to an ISA once it becomes available. I am just wondering if opening small accounts to get the bonus might be a reasonable choice.
I know it is not really in the case of bank account sincd they do credit checks and switching often just to get the bonus is not a good practice.

They do no more checks than a savings account provider. Clearly the RS offer is the best at 10% of the money at risk, and you only need to lend for 1 year. The other two are only 5%, so is what's on offer better than anything else available when you factor in a 5% boost over the lifetime of the investment?

the_learner

masonic wrote: »

They do no more checks than a savings account provider. Clearly the RS offer is the best at 10% of the money at risk, and you only need to lend for 1 year. The other two are only 5%, so is what's on offer better than anything else available when you factor in a 5% boost over the lifetime of the investment?

It's a 5% boost over the normal rate I can get from lending with them. Do I have any better alternative for a similar level of risk?

masonic

the_learner wrote: »

It's a 5% boost over the normal rate I can get from lending with them. Do I have any better alternative for a similar level of risk?

What's the normal rate you can get from them and how long is your money tied up?

the_learner

masonic wrote: »

What's the normal rate you can get from them and how long is your money tied up?

Need to invest for 1y and Growth Street is paying 6.5% on the 1y line. Rate setter I guess pays less then 4%.

masonic

the_learner wrote: »

Need to invest for 1y and Growth Street is paying 6.5% on the 1y line. Rate setter I guess pays less then 4%.

11.5% is not bad. RS pays peanuts, but if they are giving you a 10% bonus, it's a no brainer.

the_learner

masonic wrote: »

11.5% is not bad. RS pays peanuts, but if they are giving you a 10% bonus, it's a no brainer.

Well on this aspect... I can see that rates differ a lot depemding on platform. I think it is because of different risk faced by a given investment.
Is there anywhere a comparison tool to compare P2P rate based on similar risk level?
Loans at Growth Street for example must be riskier than Rate Setter otherwise cannot explain why they offer almost double the rate of Rate Setter.

masonic

the_learner wrote: »

Well on this aspect... I can see that rates differ a lot depemding on platform. I think it is because of different risk faced by a given investment.
Is there anywhere a comparison tool to compare P2P rate based on similar risk level?
Loans at Growth Street for example must be riskier than Rate Setter otherwise cannot explain why they offer almost double the rate of Rate Setter.

There isn't a great deal of correlation between risk and reward in P2P. I would not class RS as being as low risk as the rates on offer suggest. In contrast, there are some loans paying >10% that I would consider safer than an investment in RS.

The actual risk of a loan is hard to judge, but it is important to get a minimum rate to make it worthwhile. Most of my P2P money is in loans at 10-15%. I hold a small amount of money in loans at 8-9%. I wouldn't go any lower than that.

the_learner

masonic wrote: »

There isn't a great deal of correlation between risk and reward in P2P. I would not class RS as being as low risk as the rates on offer suggest. In contrast, there are some loans paying >10% that I would consider safer than an investment in RS.

The actual risk of a loan is hard to judge, but it is important to get a minimum rate to make it worthwhile. Most of my P2P money is in loans at 10-15%. I hold a small amount of money in loans at 8-9%. I wouldn't go any lower than that.

I see your point, but if that is the case, why platforms likeate Setter, Wellesley are still in the business? No one should lend via them anymore. Do you achieve those returns without welcome bonus? Sounds impressive.

masonic

the_learner wrote: »

I see your point, but if that is the case, why platforms likeate Setter, Wellesley are still in the business? No one should lend via them anymore. Do you achieve those returns without welcome bonus? Sounds impressive.

The reason why rates are so low is because of their popularity. People compete against each other and that drives down rates. There is much less awareness of the higher return platforms, and they appeal less to the masses because they aren't disguised as savings accounts.

None of my P2P investments include a welcome bonus.

the_learner

I found this list of platforms offering IFISA

Abundance 5% to 12%
Bassett & Gold 6.12%
Capitalrise 10% to 14%
Crowd for Angels
Crowdstacker 5% to 7%
Crowd2Fund 8.7%
Downing 4 to 7%
HNW Lending
Landbay Expected 3.75%
LandlordInvest Up to 12%
Lending Crowd 6%
Lending Works 3.6%
Money & Co 7%
Property Crowd 7% to 10%
UK Bond Network 7% to 12%