angrysaveruk
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Post by angrysaveruk on Apr 2, 2017 12:06:30 GMT
I thought it would be very interesting to hear peoples opinion on which P2P platform is the least risky (in terms of platform risk and defaults). In my opinion Zopa is the safest place to put your money. This is based on their track record, transparency and the fact they specialise in diversified personal loans which I consider alot less risky than business loans.
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elliotn
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Post by elliotn on Apr 2, 2017 12:21:08 GMT
Landbay suggest professional btl assets have proven safest.
Orchard lends to professionals with a minsiscule default record.
Zopa with safeguard, their putative challenger bank may also provide a cap backstop for the parent co with deposits.
Lending Works has borrower insurance.
For secured lending, Proplend's tranche A gives quite a lot of protection vs property falls/distressed sale (as do some LendInvest loans).
Some of MT/abl loans offer introducers covering credit risk with additional asset security.
Collateral often have buyers in place if pawn items are not redeemed.
Others also try to offer some element of payment insurance, say on invoices or export credit.
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mason
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Post by mason on Apr 2, 2017 12:25:18 GMT
Each loan has its own risks. Some loans are to individuals and some to businesses. Some are secured on assets and some are unsecured. The borrower can be identified in some loans but not others. Information provided by the platform will have varying levels of accuracy and detail.
In my view, we are simply not able to judge risk accurately, so the best we can do is take sensible precautions. I assume no loan is low risk and therefore I require a decent nominal return to compensate for risk. I favour loans that are secured on assets - to the point that I don't hold any unsecured loans. I prefer loans in which more is known about the borrower rather than less.
Others will no doubt have their own views.
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bigfoot12
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Post by bigfoot12 on Apr 2, 2017 15:31:56 GMT
I find samford71 above hard to argue with, but I've been drifting away from P2P for the last 6 months. I am reducing money on all platforms except Octopus Choice, and I don't plan on reversing that until my other platforms get FCA approval. Until then I guessed (I have no idea) that platform failure on the 10% type platforms was significantly higher than it was on Octopus Choice (fully approved, and part of larger regulated company). Now since FS got full approval I need to think again. (FS is the first of my 9 P2P lending platforms to get FCA approval - I invested in OC (my 10th) after they received full approval.) It is platform failure that worries me much more than whether or not default rates will be a little higher than target. Whilst I was very worried that I platform I was using might not get approval, I'm not sure that actually getting it makes me much more confident. |
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angrysaveruk
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Post by angrysaveruk on Apr 2, 2017 18:54:19 GMT
I find the argument that consumer lending platforms (or for that matter BTL platforms like Landbay) are less risky rather odd. If depo cash is at 1%, Zopa Classic at say 4% and a bridge platform at 10%, then to produce the same cashflow stream, for every £100k on Zopa, you need just £33k on the bridge platform. I'd much prefer to have £67k in a bank and £33k in a bridge platform than £100k sitting on Zopa (a platform with a 11 year track record of not being able to make a bean of profit!). I'm massively more liquid in a distressed scenario and have 67% of my money with FSCS protection. Bridge Platform is a P2P platform that provides bridging loans? My perception that person finance loans are less risky is really just based on personal experience. When I first got into P2P the two choices were Zopa or Funding Circle. Based on personal experience of knowing a number of people who have defaulted on business loans but very few people who have defaulted on personal loans I decided to go down the Zopa route. Some of the platforms offering secured loans might be worth looking into, I might have got overly confident in my view that personal loan P2P is low risk because I havent had any bad experiences over 4 years. If Zopa has made a loss for 11 years straight I might be underestimating their platform risk!
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