Peer-to-peer lending sites: MSE guide discussion

18485878990308

Comments

  • TheShape
    TheShape Posts: 1,777
    First Anniversary Name Dropper Combo Breaker First Post
    Forumite
    edited 1 May 2017 at 6:36PM
    just signed up to collateral UK. how often do they put up new loan?

    On average you might get a couple of loans per week. You'll also usually have a couple of renewal loans per week on average also and they fill very quickly as there is often only a small part of the loan available. Most loans have fairly small bid limits to allow investors a chance to get loan parts. Don't expect to get much invested for a while unless you take decent sized chunks of the property loans.
  • elephantrosie
    elephantrosie Posts: 467 Forumite
    TheShape wrote: »
    On average you might get a couple of loans per week. You'll also usually have a couple of renewal loans per week on average also and they fill very quickly as there is often only a small part of the loan available. Most loans have fairly small bid limits to allow investors a chance to get loan parts. Don't expect to get much invested for a while unless you take decent sized chunks of the property loans.

    I cannot see anything in their pipeline or advertised on p2p website.
    Another night of thankfulness.
  • elephantrosie
    elephantrosie Posts: 467 Forumite
    TheShape wrote: »
    Any current user experiences for Assetz Capital?

    Still early days in p2p having only opened my first account back in February. I've got approx £8.5k in p2p across 5 platforms but not particularly evenly spread.

    Ablrate approx £3.5k
    Collateral approx £1.5k
    Moneything approx £1.5k
    Lending Works (IFISA) approx £1.5k
    Funding Secure < £500

    I will be investing more in Collateral and Moneything as loans become available but relatively few new loans have been available and it's been more difficult to invest through the SM than with Ablrate. Funding Secure is a platform that I just haven't got a real grasp of yet. I expect that with interest paid on loan maturity I haven't got used to any interest, let alone capital repayments yet. With the IFISA available I need to look a little more closely at using the platform effectively.

    I'm thinking that another platform would be useful for diversification. LendingWorks requires little/no ongoing management and I'm thinking five actively managed platforms will be around the right number for me to manage. AC also has five different accounts to invest in. I'd be interested in anyone's experience of these various accounts.

    why do you not invest with ratesetter?
    Another night of thankfulness.
  • TheShape
    TheShape Posts: 1,777
    First Anniversary Name Dropper Combo Breaker First Post
    Forumite
    TheShape wrote: »
    On average you might get a couple of loans per week. You'll also usually have a couple of renewal loans per week on average also and they fill very quickly as there is often only a small part of the loan available. Most loans have fairly small bid limits to allow investors a chance to get loan parts. Don't expect to get much invested for a while unless you take decent sized chunks of the property loans.
    I cannot see anything in their pipeline or advertised on p2p website.

    Usually an update appears in the new New loan section on the p2p Independent forum the day before a new loan, usually appears in the pipeline around then also. You can see from the posts roughly how often loans become available. The existing loan thread on the forum is where renewals are listed for the coming week.
  • bigadaj
    bigadaj Posts: 11,531
    Name Dropper First Post First Anniversary
    Forumite
    why do you not invest with ratesetter?

    Crap rates presumably.
  • elephantrosie
    elephantrosie Posts: 467 Forumite
    TheShape wrote: »
    Usually an update appears in the new New loan section on the p2p Independent forum the day before a new loan, usually appears in the pipeline around then also. You can see from the posts roughly how often loans become available. The existing loan thread on the forum is where renewals are listed for the coming week.

    how long does it take for funds to get deposited into collateral account? i dont want to have money sitting there for weeks without any movement.
    Another night of thankfulness.
  • elephantrosie
    elephantrosie Posts: 467 Forumite
    bigadaj wrote: »
    Crap rates presumably.

    indeed the rate is half of MT, but it has a provision fund. i am learning to diversify my investments and see how ratesetter fare as a p2p company. i have just set up an account and going to invest a few hundred quids.
    Another night of thankfulness.
  • KTF
    KTF Posts: 4,820
    Combo Breaker First Post First Anniversary
    Forumite
    bigadaj wrote: »
    Crap rates presumably.
    I have moved all my money out of ratesetter into assetz capital due to the rates dropping a lot over the past few weeks.
  • jamesd
    jamesd Posts: 26,103
    Name Dropper First Post First Anniversary
    Forumite
    edited 2 May 2017 at 5:29PM
    You'd probably lose more in just routine selling of investments at RateSetter than you'd lose to bad debt at Ablrate or MoneyThing.

    The RateSetter sale charges (called sellout as perhaps a Freudian slip revealing how they think if those selling) can be quite unpleasant and you can't know in advance what they will be:

    1. A fixed charge of 0.25% vs nil at most places.
    2. A term adjustment fee, which pretends you had invested in loans of a term which started and ended when you bought and sold. Sell after say nine months and capital will be taken from you to reduce your effective interest rate to nine months of the monthly market. Sell at a year and it'd be the annual rate, currently quoted as 2.9%. And so on until you've held for the lowest term permitted in the market you're in. So you might think that you're investing in five year loans at say 5% but you'd end up having that roughly halved if you sold at a year.
    3. An interest rate adjustment fee. If interest rates go up you have capital taken from you to pay the buyer the current market rate. If interest rates go down RateSetter takes the profit for themselves instead of passing it to you.

    Take care with RateSetter, they have the least transparent exit cost I know of in the P2P world. You simply can't trust that when you exit you'll end up with the interest rate that tempted you to invest.

    Zopa has similar effects but they don't have the term adjustment fee and the profit if interest rates have dropped goes to their protection fund, as it used to at RateSetter.

    By way of contrast, at Ablrate or MoneyThing you could invest a dozen times over eleven months in loans at 12% a year rate and sell a dozen times as well and you'd still end up with the full 11% (11/12 months * 12%), less a little for any time your money wasn't invested. And less any bad debt.

    Instead of a protection fund the loans at most places have security, over items or properties or both. Some also have additional first loss stakes or guarantors. For example, at MoneyThing a common set of loans has the loan backer taking the first 5% of any losses after sale of security. At Ablrate many loans have had the introducing company guaranteeing 100% of any loss after sale of security (subject to it being able to pay, of course). Those things are less neat than a protection fund because they can take longer but they can still provide substantial protection.

    The Zopa and RateSetter protection funds also vary in how they handle possible fund shortfalls. If RateSetter thinks that they might not eventually have enough to pay all claims they will start to take a cut of all interest payments, say half. A person who lent at 5% over five years would then have 2.5% of that taken from them as lower monthly payments. A person who lent for a year at 3% would have 1.5% taken instead. If they think that won't be enough they can start to take all of the interest and some of the capital. By contrast, at Zopa they don't predict whether it might run short, instead they wait until it does then each person gets the debt collection results of the part of their own loans that it doesn't cover. So if you are on lower risk markets you suffer less than if you are in higher risk markets, while RateSetter is more about interest rate and loan term than the risk that ends up becoming defaults. Neither of these things has happened yet and neither expects them to happen, but that's what the contingency plans are if it does.
  • taylornj
    taylornj Posts: 295
    First Post First Anniversary Combo Breaker
    Forumite
    edited 2 May 2017 at 3:59PM
    jamesd wrote: »
    By way of contrast, at Ablrate or MoneyThing you could invest a dozen times over eleven months in loans at 12% a year rate and sell a dozen times as well and you'd still end up with the full 11%, less a little for any time your money wasn't invested. And less any bad debt.
    [STRIKE]Think there is a slight typo - should that 11% be 12%.[/STRIKE]Edit - Not read correctly 11% as over 11months.
Meet your Ambassadors

Categories

  • All Categories
  • 342.5K Banking & Borrowing
  • 249.9K Reduce Debt & Boost Income
  • 449.4K Spending & Discounts
  • 234.6K Work, Benefits & Business
  • 607.1K Mortgages, Homes & Bills
  • 172.8K Life & Family
  • 247.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards