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Post by hapaxlegomenon on Oct 20, 2016 7:56:06 GMT
As something of a newbie to the world of peer-to-peer lending, the interest rates on offer appear very tempting, though no doubt this reflects the element of risk involved.
I am wondering what checks on the creditworthiness of borrowers ("due diligence" is the term I believe) Moneything makes before inviting potential lenders to part with their money? Browsing through some of the threads on here (excellent site by the way !!), it appears that a lot of the onus is on individual investors with, for example, some analysis of company accounts.
In particular, are there any things that would lead Moneything to definitely rule out a request from a borrower? I'm thinking maybe of "worst case" scenarios off the top of my head such as an individual having been declared bankrupt or a company having a Winding Up Petition issued against it.
Apologies if this has already been covered elsewhere. Maybe somebody could point me in the right direction.
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littleoldlady
Member of DD Central
Running down all platforms due to age
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Post by littleoldlady on Oct 20, 2016 8:13:12 GMT
There are basically two strategies you can use to mitigate risk, although they can be combined which is what I recommend.
You can carry out your own DD and share in group DD on this forum. This is unsurprisingly the preference of most on this forum, but they only represent a fraction of total lenders.
You can aim to diversify as much as possible so that the extra interest more than compensates for the inevitable losses. Diversify across platforms and loans.
You can combine the two by basically following the diversity strategy but avoiding any that you are particularly concerned about.
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Post by hapaxlegomenon on Oct 20, 2016 8:19:10 GMT
There are basically two strategies you can use to mitigate risk, although they can be combined which is what I recommend. You can carry out your own DD and share in group DD on this forum. This is unsurprisingly the preference of most on this forum, but they only represent a fraction of total lenders. You can aim to diversify as much as possible so that the extra interest more than compensates for the inevitable losses. Diversify across platforms and loans. You can combine the two by basically following the diversity strategy but avoiding any that you are particularly concerned about. Thanks, I understand that. With respect though my actual question was what due diligence does Moneything itself undertake on borrowers? Are you saying that the answer is none?
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hazellend
Member of DD Central
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Post by hazellend on Oct 20, 2016 8:35:35 GMT
The security is more important to me than the borrower. If the security is good I'll lend to pretty much anybody as I'm happy to wait to get some/most/all my money back if they default.
I think the rates more than compensate for the risk for what it's worth. These sites only have a few thousand lenders but if asset backed crowdfunding takes off in a big way rates could easily half from here.
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treeman
Member of DD Central
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Post by treeman on Oct 20, 2016 10:34:52 GMT
There are basically two strategies you can use to mitigate risk, although they can be combined which is what I recommend. You can carry out your own DD and share in group DD on this forum. This is unsurprisingly the preference of most on this forum, but they only represent a fraction of total lenders. You can aim to diversify as much as possible so that the extra interest more than compensates for the inevitable losses. Diversify across platforms and loans. You can combine the two by basically following the diversity strategy but avoiding any that you are particularly concerned about. Thanks, I understand that. With respect though my actual question was what due diligence does Moneything itself undertake on borrowers? Are you saying that the answer is none? Obviously, MT will carry out DD & checks on borrowers, security and exit strategies for all loans - I'll tag MoneyThing for his input 
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