Loanpad P2P - Reviews, experiences, info or updates, post them here. I'm having a dabble.

Albermarle

Aceace said:

Albermarle said:

Sea_Shell said:

I suppose you have to ask what LP rates may increase to over the next few months, from August?

Will they be able to re-establish clear water between what they offer and protected cash deposits?

What does that "gap" need to be?

Taking into account the (usual) accessibility of funds in LP as opposed to being locked away for a year.

The other possible issue is what happened to one of their competitor/similar operation, Assetz Capital.
There was so much money withdrawn from the site due to the ability to get reasonably similar safe savings rates nowadays, that the business model for retail P2P became unviable.
So they stopped overnight and all lenders monies were frozen for around 9 months. It is starting to be be paid back now in tranches over a few years, minus a special fee.....

Assetz Capital and Loanpad have similarities, but they also have major differences. The main difference is the length of the contracts. AC contracts were up to 5 years, while LP contracts are up to 2 years. All 183 live loans currently on LP are due to repay within a year. That makes a massive difference to the ability to repay in the event of a run. 

Another major difference is that many loans on LP are linked to base rates, so they can respond much quicker that AC could in the event of rising rates, as has been evidenced. Again the shorter loan lengths also make it much easier to react to rising rates. All in all LP's model is far superior to the inflexibility of AC. Again this was evidenced by the massive repayment delays at AC during Covid compared to the zero repayment delays at LP.

AC blame investors for their problems, but the truth is that AC management simply weren't up to the job of designing a product that could cope with anything beyond the usual benign conditions. 

I speak as both a platform investor and a very minor equity investor in both platforms. 

All fair points, but I would add another one.
AC's borrowers/property developers normally get the money in tranches, as the development can be seen to be progressing. The nightmare scenario was that if the funds dried up the developments could stop mid build, and everybody would be a big loser. ( very difficult to sell half built properties) So AC had to freeze withdrawals to make sure developments were funded to completion, and therefore a much better chance of the loan being repaid. So freezing withdrawals actually avoided a potentially much bigger problem.

Aceace

Albermarle said:

Aceace said:

Albermarle said:

Sea_Shell said:

I suppose you have to ask what LP rates may increase to over the next few months, from August?

Will they be able to re-establish clear water between what they offer and protected cash deposits?

What does that "gap" need to be?

Taking into account the (usual) accessibility of funds in LP as opposed to being locked away for a year.

The other possible issue is what happened to one of their competitor/similar operation, Assetz Capital.
There was so much money withdrawn from the site due to the ability to get reasonably similar safe savings rates nowadays, that the business model for retail P2P became unviable.
So they stopped overnight and all lenders monies were frozen for around 9 months. It is starting to be be paid back now in tranches over a few years, minus a special fee.....

Assetz Capital and Loanpad have similarities, but they also have major differences. The main difference is the length of the contracts. AC contracts were up to 5 years, while LP contracts are up to 2 years. All 183 live loans currently on LP are due to repay within a year. That makes a massive difference to the ability to repay in the event of a run. 

Another major difference is that many loans on LP are linked to base rates, so they can respond much quicker that AC could in the event of rising rates, as has been evidenced. Again the shorter loan lengths also make it much easier to react to rising rates. All in all LP's model is far superior to the inflexibility of AC. Again this was evidenced by the massive repayment delays at AC during Covid compared to the zero repayment delays at LP.

AC blame investors for their problems, but the truth is that AC management simply weren't up to the job of designing a product that could cope with anything beyond the usual benign conditions. 

I speak as both a platform investor and a very minor equity investor in both platforms. 

All fair points, but I would add another one.
AC's borrowers/property developers normally get the money in tranches, as the development can be seen to be progressing. The nightmare scenario was that if the funds dried up the developments could stop mid build, and everybody would be a big loser. ( very difficult to sell half built properties) So AC had to freeze withdrawals to make sure developments were funded to completion, and therefore a much better chance of the loan being repaid. So freezing withdrawals actually avoided a potentially much bigger problem.

I completely agree, but that issue just further highlights the lack of will or ability of AC management. They claimed that it wasn't possible to use their vast institutional funds to finance the later tranches, yet many other platforms have found ways to do that on a pari passu basis, so it shouldn't have been an insurmountable issue. 

Again the comparison with Loanpad's model is stark. Many Loanpad Loans are also funded in tranches, but there's never any obligation for Loanpad to find the funds. That responsibility falls on the leaning partner. There's still the potential for the same problems you described if the partner is unable to raise the funds. However, the partners are heavily incentivised to do so, as, being junior partners in the relationship, the partners will lose all of their committed funds in the loan before Loanpad loses a penny. So, again, Loanpad's model is clearly far superior to that of AC.

Sea_Shell

I think they are going to come under pressure to raise rates quicker and further than they have advised so far.

I'm not pulling money out...yet!!    But I've decided not to put more in, and went for a fully protected 1 yr fix at 6% instead.  

They need to widen the gap again, quickly IMO, regardless of "ease of access" compared to other types of account.

ZeroSum

Latest press release  As of 01 August 2023: Classic / ISA Classic              5.00%   Premium / ISA Premium         6.00%    We continue to see a good level of redemptions of loans originated before the ongoing interest rate increases with many more expected over the coming months. You can view all activity (including redemptions) in the Updates tab. Accordingly, we are pleased to announce additional increases to rates in August as follows: As of 15 August 2023: Classic / ISA Classic              5.10%   Premium / ISA Premium         6.10%    As of 29 August 2023: Classic / ISA Classic              5.20%   Premium / ISA Premium         6.20%

We are of course continuing to monitor interest rates and a further update will be provided in due course.

Sea_Shell

Loanpad have today reached the 5000 lenders mark!!!  

Average lender £16,120.  = 80,600,000.

Of which £79,846,000 is out on loan, over 184 live loans.


For info, the rate they've attracted new lenders is as follows...(taken from various posts on the thread, to save you trawling though)     Steady progress.

Nov 21 - 3300
Dec 21 - 3400
Jan 22 - 3550
Feb 22 - 3600
May 22 - 3880
Jun 22 - 4000
Aug 22 - 4110
Dec 22 - 4500
Apr 23 - 4770
Jul 23 - 5000

brucefan_2

Thanks for that info.

And their rates go up again tomorrow.

where_are_we

I have been with Loanpad for almost 2 years when I got a £50 welcome bonus opening an IFISA account (ISA Premium). Amount invested is about 2% of our total wealth. I will not be adding any new money in the foreseeable future but will stick with them even though the small premium over cash Isa rates (no risk) makes me uncomfortable.

older_and_no_wiser

I'm with them too and having the same thoughts about whether it's worth leaving my money with them. I like the idea of putting the money into an ISA wrapper on Loanpad. I need to wait till next April as I've already got my annual limit for this year. 

Sea_Shell

I notice that they now have a 13th Lending Partner on board.

Sea_Shell

Even with today's interest rate rises, I feel they need to go further (very soon) in widening the gap, as one can now get easy access in a  protected account at 4.93%