stevio
Member of DD Central
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Post by stevio on Oct 19, 2017 8:55:34 GMT
I am interested in finding out more about P2P platforms that offer some form of BUYBACK. However, to find out I need to wade through 10-20 page threads on the platforms themselves, the vast majority not specific to buybacks. Also, I am not sure of the main points to be aware of as I am new to this type of agreement.
Is anyone able to summarise the pros and cons of this type of agreement, which platforms offer them and which are considered the best and why?
Thanks in advance!
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Post by clandestino52 on Oct 19, 2017 9:11:25 GMT
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Post by wiseclerk on Oct 19, 2017 15:16:11 GMT
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ptr120
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Post by ptr120 on Oct 20, 2017 6:42:34 GMT
On Mintos I mostly buy loans with a buyback. I might be stating the obvious but you are reliant on the financial strength of the company that listed the loan. I currently hold two loan parts where the company that listed the loans is currently unable to honor the buyback commitment.
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p2pmark
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Post by p2pmark on Oct 20, 2017 7:07:52 GMT
On Mintos I mostly buy loans with a buyback. I might be stating the obvious but you are reliant on the financial strength of the company that listed the loan. I currently hold two loan parts where the company that listed the loans is currently unable to honor the buyback commitment. Which providers are unable to buyback?
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ptr120
Member of DD Central
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Post by ptr120 on Oct 20, 2017 7:24:03 GMT
Eurocent. You can find more information on the Mintos help pages.
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JamesFrance
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Port Grimaud 1974
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Post by JamesFrance on Oct 20, 2017 7:51:06 GMT
This type of P2P lending is quite different from the UK pattern where a high proportion of the interest charged to the borrower is passed on to the investor.
There are two types of platform offering these investments. The first is operated by a personal finance company which makes high risk loans at high interest rates with no security and is financing their expansion by borrowing from P2P investors at a lower interest rate than they would pay by issuing bonds. The first of these was Twino which was initially very profitable for investors but has now reduced the interest rates.
The second type is operating a marketplace to do the same but with several loan originators, this was pioneered by Mintos which now has many originators available and also offers different types of secured loans without buy back.
The risk for investors is that the loan originator's business fails so that they are unable to honour their guarantee. There are also risks that regulation or legislation in various countries could interfere with the way they are operating and a small risk attached to the platform itself.
These investments also mean that there is currency risk as most only accept deposits in Euros. Mintos has a facility for conversion within their platform but none of the loans are in pounds so there is an exchange cost.
So far my buy back investments in Euros have been considerably more profitable than my UK P2P investments after the inevitable defaults.
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