Can only imagine it was an FCA suggestion to only sell complete loans? Biggest improvement for lenders would be to split it into £10 or even £25 units, and to clarify the tax implications that easteregg mentioned.
Couldn't agree more. This is unsecured lending at its riskiest. As such a model like FC's where risk is spread over 100 or so loans is essential. That would require a minimum platform investment of £25k. Too much for me and many others here I would have thought. Whole loans is hardly in the spirit of P2P as we know it.
OK, the 6% is towards the higher end of the interest. Let's halve it, and go for the bottom end - 0.3%/day. So I receive £1,120 after 60 days. One of 14 goes south. £14,560 return = 26.45%. Much nearer your estimate, but still above it. Is your estimated return including periods of unlent money?
What if/when a borrower doesn't repay? Obviously, there's no PF, but does your £120 fee include full debtor management, right up to enforcing a CCJ or bankruptcy? Can borrowers roll their loans over?
I'm presuming all borrower and lender IDs are anonymised to the other party, but how much pre-loan information is available on borrowers?
Thanks for the queries.
We are a young company constantly seeking to improve our service, so we are grateful for the feedback and queries.
In response to your queries:
Correct – we have no provision fund. Our loan administration fee includes our costs for handling defaults. Correct – our estimated annual lender returns account for expected void periods where lender money is not being utilised. Correct - both borrower and lender remain anonymous to each other. All borrowers have to pass our bespoke internal credit decision engine before being allowed onto the platform.
Please let us know if there is anything else we can help with.
Post by The Money Platform on Nov 12, 2016 18:11:39 GMT
A big thanks for all the questions and feedback. We have only recently launched so we are delighted to get feedback to help us improve.
The aim of our platform is to give lenders access to the short term loan market, access that was previously almost exclusively reserved for institutions. There is huge demand in the UK for short term loans. Now individuals can lend to these borrowers too.
This is a higher risk product than other peer to peer lending options that are available, but also comes with larger upside. We would never recommend that anyone invests all of their available investment portfolio onto our site. We envisage lenders, that choose to use our site, investing a small proportion of their overall peer to peer investment portfolio with our platform, giving them some diversification and access to a higher risk/higher reward product.
We were invited onto the FCA’s Project Innovate program as there is the belief that this type of system can in time make short term loans cheaper for borrowers. Indeed, our most popular loans so far have been issued at 0.3% interest per day which are less than half the cost of the 0.8% per day loans being issued by the majority of institutional short term lenders currently authorised in the UK. And even at our cheapest loans of 0.3% interest per day, lenders can still achieve a very attractive annualised rate of return on their money.
If any of you see fit to look at, and perhaps use, our platform it would be great to hear your feedback.
Post by sayyestocress on Nov 12, 2016 22:14:06 GMT
There would be a lot more interest from me if the minimum per borrower was a lot less than £250. I currently lend less than that per borrower in secured lending, so I'm not comfortable with such high amount per borrower on an unsecured payday loan. Is there the potential for this to change in the future or will this always be 1 lender per borrower? Also on what amount is income tax due, is it the amount before money platform take their cut or after? If it's the former it would scare me off as a high rate tax payer. Thanks.
can you tell us who decides the rate the borrower pays? is it just the lowest available? istm that we are just likely to end up in a race to the bottom with regard to rates? or is the rate tailored to the borrower, i.e. they are offered 0.5%? if so what if there is money avail at 0.4 but not at 0.5, will the loan match or not?
do you have plans to let us fund a part of a loan instead oh having to take the full risk from each borrower?
Intrepid guy, hat's off; how long will you likely be just and case we need to mount a fully funded search & rescue?
I have made the intial investment, placed an offer, and requested more info from MP as to some of their procedures. Will let you know.
Summary so far. Registration was easy. Verification happened with no problems. Deposit was easy via debit card (can't speak for bank transfers) Placing a loan offer was easy, but in all honesty the UI for doing this could do with a little tweaking, and improvement. I asked a few questions of MP when the offer was placed and received a quick and relevant response. This included a question as to when my money was likely to be lent out. 9am this morning my first loan was made. So far "it does what it says on the tin"