P2P Lending

[HighlandTiger]

I've been dipping my toes into P2P lending. Currently getting paid 1% interest per month with Saving Stream. The loans are mainly short term bridging property loans with an incredibly active secondary market. Very happy so far.

But my point I'm trying to make is that P2P lending is an absolute minefield for a beginner, but I found that lurking on a P2P forum http://p2pindependentforum.com I found a wealth of knowledge which has certainly opened up my eyes to this type of "investing".

If anyone is thinking of sticking some of their hard earned pennies into this sector, I would strongly advise checking out this forum first. 

[jayboat]

RateSetter have a promo were if you you deposit £1000 and keep it there for 1 year, you get a bonus of £100 deposited into a monthly account. As a matched better, i checked the terms first but they seem fair to me and easy to work with. I might take a punt with this as on the face, it looks like an easy 10% for the first year plus the normal interest. 

Anyone got any thoughts on this?

[JohnD]

I've been looking on funding circle and have seen comments on and read a bit on a p2p forum but was wondering for any of the people on this forum that use it do you have any rules of what to look for or avoid? Can be easy to look at all the info and then decide that it's more or less fully funded so everybody else must see it as ok and I don't want to do that. I'm only looking to invest around £100 p/m and then spread £20 into different ones to diversify myself, other than this I'm mainly seeing their credit score looks steady, not much outstanding debt and providing up to date financials. Can anyone else share any tips before I go ahead? Would be much appreciated. Thanks

John

[sovereignsteve]

1 hour ago, JohnD said:

I've been looking on funding circle and have seen comments on and read a bit on a p2p forum but was wondering for any of the people on this forum that use it do you have any rules of what to look for or avoid? Can be easy to look at all the info and then decide that it's more or less fully funded so everybody else must see it as ok and I don't want to do that. I'm only looking to invest around £100 p/m and then spread £20 into different ones to diversify myself, other than this I'm mainly seeing their credit score looks steady, not much outstanding debt and providing up to date financials. Can anyone else share any tips before I go ahead? Would be much appreciated. Thanks

John

 

some useful info in this thread

[JohnD]

I had read something on here a week or so ago something similar and when this topic came up it made me look into it more. Will look at saving stream a bit more today and see with which one to start with. Thanks

[ArthGoch]

Unless Saving Stream have altered their entry level I think the minimum investment per loan is still £100. Thus the spreading of investments in order to hedge risk may not be what you are looking for.

Some of the 'older' stalwarts like Zopa and  Funding Circle have a lower entry level. Also Wellesley might be of interest. 

[SoulUK]

I currently have a small amount invested in Zopa

I am toying with stopping the investment and starting to draw it back out as I feel while interest levels are low this model is an ok risk.

However when (with the next two years) the rates start increasing this model risk and loses will increase

Any thoughts?

[HighlandTiger]

@ArthGoch. Saving stream have a minimum of £100 when prefunding a loan but on the secondary market you can buy as little as a penny.

[ArthGoch]

5 hours ago, SoulUK said:

I currently have a small amount invested in Zopa

I am toying with stopping the investment and starting to draw it back out as I feel while interest levels are low this model is an ok risk.

However when (with the next two years) the rates start increasing this model risk and loses will increase

Any thoughts?

IMHO I don't think the main detraction from using  Zopa in the next couple of years is going to be the level of default, but is more a case of the diminishing returns. Zopa have bad debut provision covered, but over the near three years that I have lent on the platform the rate of return has been reducing fairly significantly. Conversely they are one of if not the most attractive providers when it comes to taking out a loan. Thus if they maintain this position I cannot see rates to lenders rising significantly 

Most recent data seems to favour the position that a interest rate rise within the short term ( 1 year projection) are less likely, and with others like the EIU forecasting as recently as yesterday of a flat line up to at least 2020.

Even those that are bullish about rate increases tend to concur that any increase will be gradual and no where near the levels that we have seen in our recent history. Thus I cannot see much of a change to the risk v reward model associated with Zopa