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  • FIRST POST
    • Former MSE Paloma
    • By Former MSE Paloma 29th Dec 14, 8:11 AM
    • 526Posts
    • 245Thanks
    Former MSE Paloma
    MSE News: Peer-to-Peer lending to move into the mainstream in 2015
    • #1
    • 29th Dec 14, 8:11 AM
    MSE News: Peer-to-Peer lending to move into the mainstream in 2015 29th Dec 14 at 8:11 AM
    "Christine Farnish, chair of the Peer-to-Peer Finance Association, explains why 2015 will see P2P lending go mainstream..."

    Read the full story:

    Peer-to-Peer lending to move into the mainstream in 2015




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Page 1
  • jamesd
    • #2
    • 29th Dec 14, 8:22 AM
    • #2
    • 29th Dec 14, 8:22 AM
    In the view of the Peer-to-Peer Finance Association what should a P2P consumer lending platform do when it has issued incorrect annual statements to borrowers? Is it required to refund interest for the period covered by the incorrect statement, like other places?
    • VT82
    • By VT82 29th Dec 14, 11:34 AM
    • 1,050 Posts
    • 890 Thanks
    VT82
    • #3
    • 29th Dec 14, 11:34 AM
    • #3
    • 29th Dec 14, 11:34 AM
    I don't know much about P2P lending, but it seems a bit disingenuous to describe Stocks and Share's ISAs as 'high risk'. I'm sure there will be plenty of S&S ISA choices that are lower risk than P2P lending?
    • rtaylor1729
    • By rtaylor1729 29th Dec 14, 11:37 AM
    • 2 Posts
    • 0 Thanks
    rtaylor1729
    • #4
    • 29th Dec 14, 11:37 AM
    • #4
    • 29th Dec 14, 11:37 AM
    One of the issues I have found with P2P lending (which seems to be overlooked in most discussions), is that to actually get your money back out of the system, you will have to pay a removal fee (referred to as Rapid Return on Zopa). You can, of course, elect not to reinvest the money when capital/interest is paid, but then you don't get the advertised rate and you might as well stick it in a 5 year ISA as the rates aren't that far off when tying up for so long.
  • jamesd
    • #5
    • 29th Dec 14, 2:16 PM
    • #5
    • 29th Dec 14, 2:16 PM
    You get the advertised rate for as long as the money is invested and when it is returned you can pay it into any other investment you want. If you want to sell early there can be a charge and you might not be able to sell loans that have defaulted or even those that have ever been late, depending on the rules of each specific place. Debt collection can mean that you're committed to a ten to fifteen year business relationship with a peer to peer platform even after you stop new lending.
    • TattyBear
    • By TattyBear 29th Dec 14, 6:48 PM
    • 3,755 Posts
    • 1,765 Thanks
    TattyBear
    • #6
    • 29th Dec 14, 6:48 PM
    • #6
    • 29th Dec 14, 6:48 PM
    Debt collection can mean that you're committed to a ten to fifteen year business relationship with a peer to peer platform even after you stop new lending.
    Originally posted by jamesd
    Both Ratesetter and Zopa have well established bad debt contingency funds which are used to pay loans and interest to lenders when borrowers default. It's only if you wish to deal with the likes of Funding Circle who couldn't give a damn about lenders when borrowers default, that you have to start dealing with debt collection.
  • jamesd
    • #7
    • 29th Dec 14, 7:49 PM
    • #7
    • 29th Dec 14, 7:49 PM
    There's much more to P2P than just those three, with security rather than protection funds the more common approach.

    I do have bad debts at Zopa from the time before they changed their system. I expect I'll still be dealing with Zopa for at least another ten years, possibly longer given the amounts on some arrangements or IVAs.
    • TattyBear
    • By TattyBear 29th Dec 14, 9:07 PM
    • 3,755 Posts
    • 1,765 Thanks
    TattyBear
    • #8
    • 29th Dec 14, 9:07 PM
    • #8
    • 29th Dec 14, 9:07 PM
    There's much more to P2P than just those three, with security rather than protection funds the more common approach.

    I do have bad debts at Zopa from the time before they changed their system. I expect I'll still be dealing with Zopa for at least another ten years, possibly longer given the amounts on some arrangements or IVAs.
    Originally posted by jamesd
    Sounds like you lent out more than you could afford to lose.
  • jamesd
    • #9
    • 30th Dec 14, 2:52 AM
    • #9
    • 30th Dec 14, 2:52 AM
    Why would you think having debts from P2P that will take a long time to collect implies having lent more than I could afford to lose? There's no connection between the two things. Bad debts are just an inevitable part of P2P lending when it's using one of the places that doesn't have a protection fund.
    • ACG
    • By ACG 30th Dec 14, 12:19 PM
    • 19,529 Posts
    • 11,100 Thanks
    ACG
    No chance.

    They have no real presence other than online. Even then, if you want a loan, typically your banks/supermarkets and brands that people recognise are going to get first dibs on new customers.

    I have used P2P loans for clients but I dont think they will go mainstream during 2015, maybe 2017-2018 once the brand(s) become more recognised and the concept more understood. But next year is too soon.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • TattyBear
    • By TattyBear 30th Dec 14, 3:33 PM
    • 3,755 Posts
    • 1,765 Thanks
    TattyBear
    P2P ISAs won't happen in 2015. Osbourne will drag his feet due to interference from the major high street banks who don't want customers withdrawing en masse and going over to Ratesetter, Zopa or the like.
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