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Post by verunce on Oct 13, 2022 19:26:44 GMT
I created the following thread two years ago as I was considering investing in UK P2P platforms: p2pindependentforum.com/thread/17511/starting-uk-p2p-platformsThe answers on that thread discouraged me from it. However, now I am wondering if I made the right choice. I say this mainly because I never asked something I believe is quite key: how do UK P2P platforms compare to European P2P platforms in terms of reliability? Because common sense tells me that UK platforms should be more regulated, but I might be completely wrong! The thing also is that circumstances have changed a bit with the increasing rates on savings accounts. I was considering putting some money on Crowdproperty, which seems to be offering 10% interest according to 4thway. But now I see that, for example, Raisin is offering one year deposits at a rate of 4.15% (and going up) which are also protected by the FSCS. So, considering this, which option would you take? Please note that I would also consider choosing both options. Thanks very much in advance! |
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Post by Ace on Oct 13, 2022 19:36:18 GMT
You won't get 10% on CP. I'm expecting around 7.5%. The good news is that it's now much easier to get deployed there now.
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benaj
Member of DD Central
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Post by benaj on Oct 13, 2022 19:48:32 GMT
I suppose the founding members of this could provide better answers for you verunce, but where are they now? |
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Post by df on Oct 13, 2022 20:50:22 GMT
I created the following thread two years ago as I was considering investing in UK P2P platforms: p2pindependentforum.com/thread/17511/starting-uk-p2p-platformsThe answers on that thread discouraged me from it. However, now I am wondering if I made the right choice. I say this mainly because I never asked something I believe is quite key: how do UK P2P platforms compare to European P2P platforms in terms of reliability? Because common sense tells me that UK platforms should be more regulated, but I might be completely wrong! The thing also is that circumstances have changed a bit with the increasing rates on savings accounts. I was considering putting some money on Crowdproperty, which seems to be offering 10% interest according to 4thway. But now I see that, for example, Raisin is offering one year deposits at a rate of 4.15% (and going up) which are also protected by the FSCS. So, considering this, which option would you take? Please note that I would also consider choosing both options. Thanks very much in advance! If I had a choice between these two I would go for Raisin's offer. Meanwhile, Alrdermore is offering 4.35% on the same product. It may or may be not a competitive rate this time next year, but you will earn what's promised and don't need to worry about loosing your capital.
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Post by verunce on Oct 13, 2022 22:11:17 GMT
You won't get 10% on CP. I'm expecting around 7.5%. The good news is that it's now much easier to get deployed there now. Is that your average interest in the past few years? I guess those rates from 4thway could be from the most recent projects?
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Post by verunce on Oct 13, 2022 22:12:15 GMT
I suppose the founding members of this could provide better answers for you verunce , but where are they now? I'd definitely prefer anyone else's opinion rather than theirs!
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Post by verunce on Oct 13, 2022 22:16:48 GMT
If I had a choice between these two I would go for Raisin's offer. Meanwhile, Alrdermore is offering 4.35% on the same product. It may or may be not a competitive rate this time next year, but you will earn what's promised and don't need to worry about loosing your capital. I didn't know about Aldermore, thanks. Unfortunately, you need to be resident in the UK and only tax resident in the UK, which is not my case. But you've made a very valid point. And if the rates on Crowdproperty are "only" 7.5% as Ace says, then it's definitely not worth it.
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Post by Ace on Oct 13, 2022 22:39:45 GMT
You won't get 10% on CP. I'm expecting around 7.5%. The good news is that it's now much easier to get deployed there now. Is that your average interest in the past few years? I guess those rates from 4thway could be from the most recent projects? No, it's my expected achievable rate from my experience with CP over the past 4 years. The rate quoted on 4thWay is just plain wrong. The rates on CP haven't been higher than 8% for the past 6 years. They currently range from low 6's to 8%. An extra 2% is paid on late loans, but there is also some enforced cash drag between being allocated a loan and the loan starting, so there's no way you could ever achieve 10%. You can see the average yearly returns on their stats page, but bear in mind that these do not include the cash drag.
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firedog
Member of DD Central
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Post by firedog on Oct 14, 2022 6:58:57 GMT
You won't get 10% on CP. I'm expecting around 7.5%. The good news is that it's now much easier to get deployed there now. Is that your average interest in the past few years? I guess those rates from 4thway could be from the most recent projects?The average rate at the moment is probably just above 7%. You can technically earn 10%: CP charges 2% penalty interest on late loans and passes that on to the investor, so if a loan's standard rate was 8%, you'd earn 10% during the period it was late. Other P2P operators tend not to charge, or to pass on, this penalty. Against that, there is frequently a lag between pledging money and earning interest on CP, so your real return in many cases will actually be lower than the advertised rate.
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Post by lotus_eater on Oct 14, 2022 7:38:16 GMT
Is that your average interest in the past few years? I guess those rates from 4thway could be from the most recent projects?The average rate at the moment is probably just above 7%. You can technically earn 10%: CP charges 2% penalty interest on late loans and passes that on to the investor, so if a loan's standard rate was 8%, you'd earn 10% during the period it was late. Other P2P operators tend not to charge, or to pass on, this penalty. Against that, there is frequently a lag between pledging money and earning interest on CP, so your real return in many cases will actually be lower than the advertised rate. Are any of you guys actually getting 7% over a period of time? Have you tracked every penny to get an accurate XIRR? I've been lending with CP for 3 years now and my XIRR is below 5% so I'm unimpressed at the moment. I have loans in arrears from 2021 so perhaps if they ever get paid back it might come up a bit with the penalties but I'm seeing nowhere near 7% actual currently. I was reinvesting everything until recently however I've now decided to start drawing down as I can get 5% in a long term saving account now with much less risk.
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Post by Ace on Oct 14, 2022 8:02:19 GMT
The average rate at the moment is probably just above 7%. You can technically earn 10%: CP charges 2% penalty interest on late loans and passes that on to the investor, so if a loan's standard rate was 8%, you'd earn 10% during the period it was late. Other P2P operators tend not to charge, or to pass on, this penalty. Against that, there is frequently a lag between pledging money and earning interest on CP, so your real return in many cases will actually be lower than the advertised rate. Are any of you guys actually getting 7% over a period of time? Have you tracked every penny to get an accurate XIRR? I've been lending with CP for 3 years now and my XIRR is below 5% so I'm unimpressed at the moment. I have loans in arrears from 2021 so perhaps if they ever get paid back it might come up a bit with the penalties but I'm seeing nowhere near 7% actual currently. I was reinvesting everything until recently however I've now decided to start drawing down as I can get 5% in a long term saving account now with much less risk. With CP you will be getting the advertised rate of each loan you're in minus a small amount of cash drag due to the gap between pledging and loan start and any cash drag due to unallocated funds plus a small amount due to the extra 2% you earn while loans are late. Because many of the loans don't pay any returns until maturity your XIRR that's calculated from paid returns will always be lower than your true return until the point you run your account down to zero balance. I'm attempting to demonstrate this in my thread that documents the running down of one of my accounts here, which I update monthly to show how things are progressing. Others have calculated that they do get the advertised rates once they account for the accrued interest. My guess is that, if you keep your account fully deployed, the cash drag due to the pledge-to-start gap will roughly be cancelled out by the extra 2% paid on late loans. So, if, like me, you keep your lending mainly to the 7.6%+ loans you should end up with a true return around that value (assuming no losses). I've lost my working now, but my actual calculations showed that, for me, the extra 2% on late loans more than compensated for the cash drag, so even some minor losses should leave my final result somewhere near 7.5%.
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benaj
Member of DD Central
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Post by benaj on Oct 14, 2022 9:01:58 GMT
I suppose the founding members of this could provide better answers for you verunce , but where are they now? I'd definitely prefer anyone else's opinion rather than theirs! Well, if you are chasing rates like 10%, then you better check out Ace performance report. I am sure Ace has some active investment >10%, even some active paying live loans from a winddown platform like FC are over 15% if you know how to cherry pick the good ones with a time machine. Unless you spend a lot of time monitoring your p2p account and loans, p2p products are not the same as any other investment products. It's not always easy to understand the game change when platforms introduce new T&Cs. It also takes time to learn about the nuts and bolts of each platform, you may not fully understand how the platform fully works with your money in a short period. The only stop loss is at -100%, you could lose it all.
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Post by Ace on Oct 14, 2022 9:20:45 GMT
I'd definitely prefer anyone else's opinion rather than theirs! Well, if you are chasing rates like 10%, then you better check out Ace performance report. I am sure Ace has some active investment >10%, even some active paying live loans from a winddown platform like FC are over 15% if you know how to cherry pick the good ones with a time machine. Unless you spend a lot of time monitoring your p2p account and loans, p2p products are not the same as any other investment products. It's not always easy to understand the game change when platforms introduce new T&Cs. It also takes time to learn about the nuts and bolts of each platform, you may not fully understand how the platform fully works with your money in a short period. The only stop loss is at -100%, you could lose it all. Yep, plenty of good loans out there. I was notified yesterday that one of my AxiaFunder loans has settled and will pay 107% profit 😊. As you say, if only we could pick them with hindsight 😉
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benaj
Member of DD Central
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Post by benaj on Oct 14, 2022 9:37:29 GMT
Yep, plenty of good loans out there. I was notified yesterday that one of my AxiaFunder loans has settled and will pay 107% profit 😊. As you say, if only we could pick them with hindsight 😉 , so how long do you have to wait get those settlement paid?
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Post by Ace on Oct 14, 2022 9:52:04 GMT
Yep, plenty of good loans out there. I was notified yesterday that one of my AxiaFunder loans has settled and will pay 107% profit 😊. As you say, if only we could pick them with hindsight 😉 , so how long do you have to wait get those settlement paid? The capital and a large portion of the profits will be paid in a few days. The remainder could be a couple of months later once the tax position has been ratified with HMRC.
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