provision fund

Hi Sanmiguel
Yes as far as I know there is NO provision fund with Funding Circle. If fact they never stop telling us that defaults are all part of the fun of lending on their site.
I have had at one time 20K in FC and very well diversed over hundreds of loans and like you have lost a good proportion of my capital though still in profit.
Last week I sold everything I could and am now only left with the defaults which I cannot sell. I just get the feeling that I am getting out at the right time as defaults are mounting.

hi

Thanks for letting me know there isnt a fund, my fault for rushing in and not checking, i feel a bit stupid now.

You don't say how you used FC; did you choose loans yourself, or turn on Autobid, and did you use the secondary market?

Until last month, there were several ways the "game" the FC system, i.e. for those able to put in the time an effort, it was possible to earn returns significantly above the site average. But, for someone to earn above average, someone else has to earn below average, and the below average earners tended to be the time-poor investors who turned on Autobid or were seduced by the headline rates on secondary market D and E loans sold with premiums.

Last month, FC changed all this and removed all of the gaming opportunities, so that everyone's account will tend towards an average account. This had 2 main effects:

1. Most of the members of this forum, who were generally in the "gaming" camp, got the hump and sold out because they expect the higher returns that they were enjoying to fall back to the mean.
2. The "silent majority" of Autobid users should see their returns increase marginally.

It is also human nature to be loss averse; we feel the loss of something we had far harder than not having it in the first place. So, even though the returns on FC, even after losses, are similar or slightly higher than Ratesetter, it feels worse because sometimes some of our gains are cruelly stolen from us by unscrupulous trumpet crushers, dodgy lawyers, and their ilk.

So I would say stick with it and learn to accept the losses as part of the risks of lending! 

Thanks for the advice markr but if the returns are only similar to ratesetter and they have the provision fund it might be wiser to ditch fc.

I have not got out - mainly because I have not got any idea of where to go.

Any clue as to where you have gone?

FC is bit of a juggernaut...

Oh there ARE other unsecured lenders (ReBS and Lending Crowd come to mind) but I wouldn't actually recommend them to anyone .. the unsecurity on both has so far proved outstanding, completely bullet proof when faced with attempts to reclaim owing money (borrowers having variously fled the country, turned out not to be themselves after all, gone bankrupt with no assets, or just plain declined to answer the phone).

Personally I'd accept the lower rate at RS/AC (or even FC, if they can achieve it), or go play with fire at Ly/MT/ABLRate, (and others) where there is a smidgin of security, and the '12%' headline rates might yield you 8%+ at the end of the day, if you dodge all the more obvious bullets, and if the platform stands up through the next property crunch (they are almost all HEAVILY into property, because that's where all the securable assets are).