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masud butt
Posted: 29 September 2012 21:17:43(UTC)
#1

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Lots of offers for the above investing. As th income is good, which company is reliable?
eg; Funding Circle, Ratesetterm, Zopa etc, Any advice please, Thanks.
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Clive B
Posted: 30 September 2012 15:52:02(UTC)
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I've been lending money to businesses through Funding Circle for about 15 months and have had no problems with them. Good points - easy to get money in and out. Can lend to just those firms you choose (doesn't have to be all of them), can lend from £20 upwards (not sure of the upper limit, never used it), can place bids manually or through auto-lend. Once you've lent money to a firm, you can sell the loan on the second hand market.

Things to watch - bad debt (when firms go bust or are 3 months late) Also, when firms are late paying, you're prevented from selling the loan on until the loan is up to date.

Compared to other investments (e.g. Corporate bonds are probably the closest), if you're a taxpayer you'll have to pay tax on the money you make - loans can not be held in an ISA - and it'll be at your highest rate of tax (e.g. 40%) rather than at the CGT rate which would be the case with corporate bonds/equities/etc.

If you're simply after making money, considering the tax position, probably better to invest in corporate bonds/equities. I started lending partly because I wanted to help businesses (and make a little money)
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4 users thanked Clive B for this post.
masud butt on 30/09/2012(UTC), Guest on 02/10/2012(UTC), Guest on 02/10/2012(UTC), Know-it-all on 31/01/2013(UTC)
Vague Shot
Posted: 02 October 2012 12:30:14(UTC)
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Joined: 29/08/2012(UTC)
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I've been lending through Zopa for nearly five years now and now use it as a place to store money, that I have no immediate need of.

As last year I got a return of 5.85% before tax on my money after all charges and bad debts, it is not a bad place to store money.

The best thing about Zopa is that as it gets older, it gets wiser too. I think that the bad debt ratio has fallen, as they are better and more innovative about checking borrowers. On the other hand, it could be that because of the rates offered to those with good credit records, it is the place of choice for a good class borrower.

Who cares? All it means is that you have the classic fit of good savvy borrowers borrowing from good savvy lenders. A true virtuous circle.

This is a company to watch.

I have looked at the other companies in the peer-to-peer market and to me Zopa stands out, as an easy-to-use site, where you can set it all up and let it run.

But then others have other preferences. Each to their own!
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Clive B
Posted: 02 October 2012 13:55:37(UTC)
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Vague Shot

"As last year I got a return of 5.85% before tax on my money"

and there's the rub - and with Funding Circle as well (which I lend on) - its BEFORE tax. Can beat that easily in a Corporate Bond fund where no tax is paid.
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brian bennis
Posted: 29 November 2012 13:34:55(UTC)
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masud butt;16358 wrote:
Lots of offers for the above investing. As th income is good, which company is reliable?
eg; Funding Circle, Ratesetterm, Zopa etc, Any advice please, Thanks.


There are some other interesting opportunities for peer to peer investing. These include The House Crowd, SIPPclub and Rebuilding Society.
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Lender on 01/02/2013(UTC)
Clive B
Posted: 29 November 2012 16:50:55(UTC)
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I've moved all the money I could out of Funding Circle. Too much money (subjective term I know) of my loans were made non-saleable due to either being late or a "formal" bad debt. Though FC try to recover money from bad debts, that involves court proceedings and can easily take months. Difficult call then to decide whether to wait and see how those bad debts turn out, while all the time more loans can be going bad.

Given I was only ever making about 8% before tax, I decided it was too much hassle for too little after-tax reward.
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helmet
Posted: 30 November 2012 07:40:54(UTC)
#7

Joined: 30/11/2012(UTC)
Posts: 1
Avoid Peer to Peer lending has benefitted from moaning companies saying Banks will not lend etc etc

In truth many of these businesses are not viable hence why Banks will not lend in the first place. Banks have been blamed for irresponsible lending now they are blamed for not lending. Joe Public make your mind up.
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Vague Shot
Posted: 30 November 2012 08:11:07(UTC)
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The Banks are going to get worse and more expensive given Mervyn King's statement yesterday.

Soon, they will charge for your account, won't give you any interest on your savings or give you any loans. Did I hear the melting of chocolate teapots?

Peer-to-peer investing is not without risk and hassle, but it is the only feasible way to go, although the Bank of Mattress is getting more attractive.

I had some bad news yesterday, in that one of my Zopa borrowers defaulted. He’d borrowed £10 from me to fund his wedding in his sixties. After twelve months of immaculate payments, they have stopped and it looks like he’s died owing me the princely sum of £3.

I've now got over £100,000 invested in Zopa and I've had about £400 in bad debts. Strangely, that figure is reducing, as borrowers in default, seem to try to get their credit rating.back on track. I'm making just upwards of 5% on my money before tax, which isn't that high, but then, a lot of money has gone into Zopa recently and that has forced the rates down. I tend to use Zopa as a quick access deposit account.
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2 users thanked Vague Shot for this post.
Know-it-all on 31/01/2013(UTC), Fiona D. on 05/02/2013(UTC)
P L
Posted: 30 November 2012 09:29:09(UTC)
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Been using Zopa and Ratesetter pretty much from day 1. Both been good. The experience with Zopa seems to depend very much on how lucky you are in picking borrowers.

Currently prefer to use Ratesetter as managing lending is much simpler, plus they offer a monthly rollover rate which is useful it the money is going to be invested elsewhere and you need a short term home. Zopa gives you more control if you prefer to have more say in the mix of risk.

Also the use of the provision fund by Ratesetter seems a much fairer way of operating eg the risk of default is essentially shared over all lenders, and you only then suffer a lost of interest or capital if and when the fund is actually exhausted. So far the default rate has been more than covered. I guess it is essentially more bank like in that respect.
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1 user thanked P L for this post.
Clive B on 30/11/2012(UTC)
Lender
Posted: 01 February 2013 10:30:59(UTC)
#10

Joined: 31/01/2013(UTC)
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Hi all,

I'v noticed that this thread is now a bit dated but was directed here by another member after starting a topic on crowdfunding http://moneyforums.cityw...t1344_Crowdfunding.aspx , in which I was asking about the merits of crowdfunding /p2p/p2b .

i noticed that most of the conversation on this thread was to do around peer 2 peer rather than p2b (which I am more interested in). I was wondering if any of you have tried some of the new players to the market, such as Funding Knight and rebuildingsociety.com . I've read around a few forums and there seems to be a lot of discontent about the rates lenders are recieving at present on some of the bigger platforms, and have seen that lenders are currently able to get potentially much higher returns on the above two especially the latter. Anyone had any experience?

Anytips ?

Thanks in advance.
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