|
|
Post by albermarle on Jul 21, 2017 18:09:18 GMT
I am relatively new to LC and have noted various negative comments on the forum. ( Previously loans too slow to fill and now too fast !)
However with the big hitters ( or LC associates of some kind ) willing to fund the majority of new loans at the bottom end of the rate range , it is easy to take a smaller amount at a much better rate on a new loan than you can get on the SM, which gives you an average rate .
So the logic is only to buy new loans , or am I missing something ?
|
|
r00lish67
Member of DD Central
Posts: 2,691 
Likes: 4,048
|
Post by r00lish67 on Jul 22, 2017 9:07:19 GMT
I am relatively new to LC and have noted various negative comments on the forum. ( Previously loans too slow to fill and now too fast !) However with the big hitters ( or LC associates of some kind ) willing to fund the majority of new loans at the bottom end of the rate range , it is easy to take a smaller amount at a much better rate on a new loan than you can get on the SM, which gives you an average rate . So the logic is only to buy new loans , or am I missing something ? Hi albermarle ,welcome to the forum. Accepting for the moment the concept that investing with LC is a good idea, then yes your logic makes sense and it's what many forum participants did previously as you can secure much higher rates than the blended SM. Unfortunately the 'associates' can sometimes knock out your bid with their huge low bids, so you'll need to keep an eye on it. It sounds like you've already read through the other parts of the LC netherworld here, but to sum up a few of the general concerns: 1) Platform viability - not clear how LC will ever turn a profit only lending to the 'associates' plus few others. 2) Loan recovery - The last I heard (happy to be corrected) LC have not managed to recover a penny for investors of any troubled loans. 3) Poor SM -illiquid and totally opaque as there's no queue as such, just a randomly assigned spot. Also with a 0.5% fee. 4) Lack of 'will' - LC haven't listened to their customers and haven't responded in any meaningful way to addressing the above and the many other related concerns expressed here. Confess I haven't explored LC for a while, so I'm sure I'll be corrected if anything is incorrect in the above. Best of luck!
|
|
pom
Member of DD Central
Posts: 1,922 
Likes: 1,244
|
Post by pom on Jul 22, 2017 14:23:56 GMT
I am relatively new to LC and have noted various negative comments on the forum. ( Previously loans too slow to fill and now too fast !) However with the big hitters ( or LC associates of some kind ) willing to fund the majority of new loans at the bottom end of the rate range , it is easy to take a smaller amount at a much better rate on a new loan than you can get on the SM, which gives you an average rate . So the logic is only to buy new loans , or am I missing something ? That would certainly be logical and is I think what we all did....but honestly there are so many better platforms. I don't think there's anyone here that's actually happy with them
|
|
|
|
Post by GSV3MIaC on Jul 22, 2017 15:16:12 GMT
/moderator hat off
The other point is that if you do buy on the SM, you are basically helping those 'platform related big hitters' (who bought 75% of the loan at the lowest imaginable rate) to unload their positions, so they can do it to you again (all SM sales are 'blended' as near as I can tell - you get to buy £x-worth of a reasonable rate part and £9*x-worth of a low rated part .. of course the SM is the blackest of black holes boxes, so we can only guess. At least on Feeble Counterparties you can trace a loan part by it's number all through the system, see who you bought it from and who you sold it to .. the whole nine yards).
(p.s. like the others I am only here as an innocent bystander, who's rubbernecking at the ongoing car crash and marvelling over the existence of survivors).
|
|
muh3
Posts: 52
Likes: 13
|
Post by muh3 on Jul 22, 2017 20:30:12 GMT
I am relatively new to LC and have noted various negative comments on the forum. ( Previously loans too slow to fill and now too fast !) However with the big hitters ( or LC associates of some kind ) willing to fund the majority of new loans at the bottom end of the rate range , it is easy to take a smaller amount at a much better rate on a new loan than you can get on the SM, which gives you an average rate . So the logic is only to buy new loans , or am I missing something ? Hello, it is quite easy to take a small amount for a good rate on a new loan, best are the higher value loans. The lower loans under 30k get over subscribed so the rate drops. The 50k+ loans you normally get away with 0.1% under the maximum rate. The SM does not give you an average rate, I can't tell you how they match up loans exactly but on various loans you will find you get a better rate buying £21 instead of £20. LC also seems to have a bad track record on recovering money, so beware in which loans you invest.
|
|
TheDriver
Member of DD Central
Slightly bonkers
Posts: 493
Likes: 190
|
Post by TheDriver on Jul 23, 2017 12:59:22 GMT
Agree with the above, but would add that due to the number of loans offered, sticking to PM only will take many months to build a diversified position - made worse if you are selective in purchasing!
And IME, whilst it is surprising how much the return can very by changing the amount bought on the SM, it only really works for small purchases, presumably because of the potential to merge parts more evenly with larger blocks.
|
|
|
|
Post by albermarle on Jul 23, 2017 18:08:58 GMT
Thanks for the answers.
Maybe I made a mistake picking LC but there was a logic to it:
1) Already invested in safer consumer loans via anothe rplatform
2) Already invested in P2P property based loans via another platform.
3) Wanted to be exposed to more general B2B loans but had to be in an IFSA for tax reasons
4) I am not a big investor and wanted something simple to understand .
LC seemed to fit the above , so we will see.
Regarding slow diversification via new loans.
If you have a max figure you want to invest in 12 months and then only invest max 5% of that in any one new loan , then you are diversified !
Most likely I will not sell on SM but just hopefully take advantage of the good rates you can pick up in the auctions and hope their DD and my judgement has got better with time!
The two currently up on the site are not in my plan....
|
|
annie
Posts: 45
Likes: 16
|
Post by annie on Jul 24, 2017 8:06:19 GMT
Hi, and welcome. I echo others' comments. Was a big fan of this site and particularly liked the ability to ask the borrower questions before investing. This has been changed to short listed offerings that end before a reply is received. Combined with poor quality loans (many where the owner has no stake in the business) and even poorer recovery processes means I won't be investing fresh funds and will withdraw as loans repay.
A shame because they were breaking the mold to start with but are now just chasing ISA cash imo.
|
|
|
|
Post by albermarle on Jul 24, 2017 11:48:37 GMT
OK, you are not inspiring me with confidence  but as you can only open one IFSA a year , I can either carry on ( as carefully as possible ) and hope for the best, or stop now. To be honest when I read some of the issues with the other sites . Ratesetter scandal: Wellseley & Co and others then maybe LC is not too bad . At least a variety of borrowers ( not all property related) and simple to understand . Time will tell if the arrears can be better kept under control though. I see Money Thing seems to be popular but when I read about one of the loans . 13% on a disused quarry with planning permission running out with a loan still active on another P2P site and with a bank + a confusing company structure. OK there is some security ( in theory anyway ) but they are the sort of loans I would run a mile from but on MT people seem to want to dive in . Maybe they are more sophisticated investors than me ! |
|
pom
Member of DD Central
Posts: 1,922
Likes: 1,244
|
Post by pom on Jul 24, 2017 12:02:25 GMT
OK, you are not inspiring me with confidence but as you can only open one IFSA a year , I can either carry on ( as carefully as possible ) and hope for the best, or stop now. To be honest when I read some of the issues with the other sites . Ratesetter scandal: Wellseley & Co and others then maybe LC is not too bad . At least a variety of borrowers ( not all property related) and simple to understand . Time will tell if the arrears can be better kept under control though. I see Money Thing seems to be popular but when I read about one of the loans . 13% on a disused quarry with planning permission running out with a loan still active on another P2P site and with a bank + a confusing company structure. OK there is some security ( in theory anyway ) but they are the sort of loans I would run a mile from but on MT people seem to want to dive in . Maybe they are more sophisticated investors than me ! You can always transfer, but if it's this years funds you need to transfer ALL of them, which may be tricky if you have funds now tied up in loans as it may take months for them to sell in the SM. Tho I think the LC IFISA is flexible in which case you can at least withdraw what's not invested and move it back in either ready to transfer when everything else has sold or at the end of the tax year to preserve the subscription. Sure you'd have to pay tax on anything it earns outside the IFISA, but to be honest you could still potentially get a better return.
|
|
|
|
Post by albermarle on Jul 24, 2017 15:36:19 GMT
Thanks for the advice but will see it out for a few months ( cautiously) and see how it goes.
It is not a large amount of money involved ( and only a small % of overall portfolio) and total loss seems unlikely
Plus of course there is always the chance of jumping out of the frying pan into the fire.
Maybe in 6 months I will think differently !
|
|
|
|
Post by hartshay on Jul 24, 2017 17:26:29 GMT
I made some cash out of Lending crowd when they had a big introductory offer. Many certainly did not.
Plenty of other decent platforms out there if you look
Personally I use all my annual ISA allowance on funds/shares and Sipp allowance along with interest bearing bank accounts/regular saver etc before I even consider putting my annual a toe in the murky depths of the p2p jungle. LOL
|
|
TheDriver
Member of DD Central
Slightly bonkers
Posts: 493
Likes: 190
|
Post by TheDriver on Jul 26, 2017 5:18:34 GMT
If you have a max figure you want to invest in 12 months and then only invest max 5% of that in any one new loan , then you are diversified ! Most likely I will not sell on SM but just hopefully take advantage of the good rates you can pick up in the auctions and hope their DD and my judgement has got better with time! The two currently up on the site are not in my plan.... Hi again, The problem is LC's DD is appalling (and getting worse, given that their latest default is the biggest to date), so while being selective may help to avoid the blatant scammers it will take significant individual research to identify the often misleadingly plausible proposals, who might make as few as ONE payment before defaulting, with in excess of 5% of investments now gone bad across 4% of loans issued. If it takes 12 months to fully invest at 5% diversification, any default much before then will mean a loss exceeding interest earned (a situation several previous clients have experienced) so you will then have to be very brave to continue - although probably unable to make a quick exit due to opaque SM. My view was that LC were getting more desperate to lend on almost any flimsy proposal, which they were not interested in reviewing even when anomalies were pointed out, a situation which has probably worsened since the introduction of their ISA! That's why I left earlier this year, after my initial optimism that I had found an interesting and different platform - I even liked the idea of an SM which discouraged flipping, although the apparent TOTAL randomness is a little disconcerting. So I reiterate my best wishes to any continuing investors, but for me it changed from an interesting and challenging scenario to a frustrating and pointless exercise.
|
|
|
|
Post by albermarle on Jul 26, 2017 17:01:38 GMT
Regarding using ISA allowance/first part of interest tax free allowance in safer areas, rather than for P2P lending.It's sound advice but I looked at it the other way, in that the risk/reward balance of P2P lending is significantly improved if you don't then lose tax on the net earnings ( assuming there are some of course !)
. I am exposed to shares enough via my pension funds and existing cash ISA's only paying 1%, if that, so...
On a slightly different tack , I have some old inflation linked national savings bonds and I was pleased to see they are now paying >3 % tax free as they are still linked to the RPI. Glad I hung on to them !
Regarding LC themselves I have become more cautious after reading the comments and noting the sketchy info with some of the 'opportunities '
Time will tell...
Lower DD standards to get more borrowers, is always a potentially weak spot for lenders of all types, and not exclusive to LC /P2P .
Anyway seems to be working as seems to be a steady supply of new loans , about 5 a week , is that more than in the past ?
.,
|
|
muh3
Posts: 52
Likes: 13
|
Post by muh3 on Jul 27, 2017 7:32:36 GMT
Regarding using ISA allowance/first part of interest tax free allowance in safer areas, rather than for P2P lending.It's sound advice but I looked at it the other way, in that the risk/reward balance of P2P lending is significantly improved if you don't then lose tax on the net earnings ( assuming there are some of course !) . I am exposed to shares enough via my pension funds and existing cash ISA's only paying 1%, if that, so... On a slightly different tack , I have some old inflation linked national savings bonds and I was pleased to see they are now paying >3 % tax free as they are still linked to the RPI. Glad I hung on to them ! Regarding LC themselves I have become more cautious after reading the comments and noting the sketchy info with some of the 'opportunities ' Time will tell... Lower DD standards to get more borrowers, is always a potentially weak spot for lenders of all types, and not exclusive to LC /P2P . Anyway seems to be working as seems to be a steady supply of new loans , about 5 a week , is that more than in the past ? ., Yes the amount of new loans has increased quite dramatically over the last 2 months, it used to be 1 every 1-2 weeks.
|
|
but as you can only open one IFSA a year , I can either carry on ( as carefully as possible ) and hope for the best, or stop now.