tony
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Post by tony on Dec 2, 2018 8:34:58 GMT
I am wondering if I made the wrong choice when I decided which P2P platforms to use. Each month some pay interest and part of the capital back, some pay interest but no capital and some do not pay anything until the loan is paid back. FS are in the latter catagory which means I am now receiving nothing back from my investments because the loans in my portfolio are either "defaulted" or "extended", which, given that the extended loans are quite likely to end up defaulted, I could lose everything. I also stand to lose out on the other catagories but it seems to me that I would have stood a better chance of minimising my losses had I chosen platforms that pay interest and part of the capital back each month. I have money in one only platform which offers this and that is FE which, although it is no longer offering new investment opportunities, is still repaying each month both interest and a proportion of the capital on my last remaining loan. Perhaps now with the help of new extra staff and experience gained over the years FS will be able to carefully evaluate the likelyhood of a borrower ever being able to repay back the capital on a loan, which has not been paid back by end of term, before they grant an extension just because interest has been paid to date. I do not get much comfort by being told that interest has been paid to date when I am unable to get my hands on it and may lose it should FS go bust.
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archie
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Post by archie on Dec 2, 2018 8:52:11 GMT
FS works on a pawn model. Interest and capital are paid at the end of the term (6 months).
A borrower may repay early. They may repay the interest to renew the loan. It neither happens there is a default.
Look for platforms that offer amortising loans if you prefer some of the capital and interest to be repaid monthly.
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arby
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Post by arby on Dec 2, 2018 9:47:22 GMT
If you need a steady cashflow to supplement your income then I can understand why you'd like interest and a portion of capital to be repaid monthly. However, if you need that, then I'd strongly suggest that you shouldn't be in p2p. After 6 months of an FS loan, you would have received ~6% of your capital back if interest was paid monthly, this is peanuts compared to the ultimate risk of losing your capital; by this, I mean I'm pretty ambivalent between losing 100% of my capital vs 94%, to me, both are a total loss.
I agree that if the capital was to be repaid monthly then the risk would be less, but then most of the loans would never be issued in the first place. How many property developers would take out a loan that needs to be steadily repaid over 6 months when they know their project will take over a year to complete? Likewise, why would someone hand over their classic car as security if they're having to repay the loan anyway; as mentioned by the previous poster, this is a pawn model where the car is payment, the only question is if it can be liquidated for sufficient funds to clear the debt.
Basically, each platform has its pros and cons and what is right for one won't be right for another.
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mjc
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Post by mjc on Dec 2, 2018 9:51:48 GMT
I felt the same, and posted a couple of weeks ago saying I don’t like this model, so I’m voting with my feet. Nearly 40% of my original (highly diversified) investment is overdue, and a good proportion won’t return any/all capital. Yes some folks do make a killing at the expense of others by selling out early, but not everyone can do that, the strategy relies on new suckers coming in endlessly. The music has to stop sometime. I’m thinking Welendus might be a good bet? more honesty by FS of how many loans HELD TO MATURITY, pay out IN FULL with interest would be a deal maker for me staying invested. This list of best reviewed on TP might be a starting point, I’m re-arranging my portfolio and this is one of the starting points:- p2pindependentforum.com/post/300154/thread |
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arby
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Post by arby on Dec 2, 2018 10:04:38 GMT
more honesty by FS of how many loans HELD TO MATURITY, pay out IN FULL with interest would be a deal maker for me staying invested. While FS are by no means perfect, they belong to a select group who provide ALL loan data, past and present, so you can work out such things for yourself if you want. They don't spoon feed it to you, but what they give is already more than most other platforms. As has been covered many times recently, you have to forget the proposed end date; the bet is whether you think the asset is worth enough to the borrower to bother with working out a repayment plan i.e. if the property development has clear profit remaining in it then they will find a way, if it's marginal, then they can just let it default and let FS try to recover the capital.
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mjc
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Post by mjc on Dec 2, 2018 10:22:59 GMT
more honesty by FS of how many loans HELD TO MATURITY, pay out IN FULL with interest would be a deal maker for me staying invested. While FS are by no means perfect, they belong to a select group who provide ALL loan data, past and present, so you can work out such things for yourself if you want. They don't spoon feed it to you, but what they give is already more than most other platforms. As has been covered many times recently, you have to forget the proposed end date; the bet is whether you think the asset is worth enough to the borrower to bother with working out a repayment plan i.e. if the property development has clear profit remaining in it then they will find a way, if it's marginal, then they can just let it default and let FS try to recover the capital. From other’s posts on here I was not alone in thinking FS did reasonable DD, and diversifying would, in normal economic situations almost certainly give a positive return. I am quite prepared to wait even 5 years for a loan to eventually pay back. But alas I was misled into thinking I could get out after 6 months if I wished, but of course you can’t after 5 months - if then. it would be easy to say, (and I hope the FCA will enforce) such platforms to say, plainly, how what % pay back after the stated 6m, 12m, 3 years. But for me no new investments with FS. Hence I compiled this list for my own benefit: p2pindependentforum.com/post/300154/thread
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Dec 2, 2018 14:29:29 GMT
It depends entirely on how much you have to invest if you have <£5000 Welendus gives a good return and pays monthly or use bank current accounts and get 3-5%
if you have large amounts £50000+ and are prepared to work at fully diversifying and count EVERY loan as being 24 months no matter what it says then you make an excellent return make sure it is all in you FISA then FS fits the bill.
Investing in P2P to make decent return requires either leaving it for years or the easier route that requires considerable management.
Anything else is just gambling.
The exception is Welendus as stated I have yet to find a downside to this friendly well performing platform other than it does not seem to be a model that would sustain high investor capital input. Allowed to grow at its own pace it I believe it would become the best performing P2P platform for everyone investors and borrowers.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Dec 2, 2018 14:46:46 GMT
I felt the same, and posted a couple of weeks ago saying I don’t like this model, so I’m voting with my feet. Nearly 40% of my original (highly diversified) investment is overdue, and a good proportion won’t return any/all capital. Yes some folks do make a killing at the expense of others by selling out early, but not everyone can do that, the strategy relies on new suckers coming in endlessly. The music has to stop sometime. I’m thinking Welendus might be a good bet? more honesty by FS of how many loans HELD TO MATURITY, pay out IN FULL with interest would be a deal maker for me staying invested. This list of best reviewed on TP might be a starting point, I’m re-arranging my portfolio and this is one of the starting points:- p2pindependentforum.com/post/300154/threadP2P is not a philanthropic ethos it is a business. We are all here to make a profit. Selling early reduces tax liabilities and makes a profit it may be more or less depending on when you bought in. I buy loans at the end with high discount but I don’t buy a lot and the 20+% returns I get reflect my willingness to accept the risks involved. It is not a game it requires sophisticated algorithms and understanding to get the best results. As to making a killing at others expense that is just semantics. Investors make a killing at the borrowers expense so not the time to get holier than thou. That is why there are warnings at every stage of investments it is not a get rich quick vector.
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tony
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Post by tony on Dec 2, 2018 15:21:29 GMT
If you need a steady cashflow to supplement your income then I can understand why you'd like interest and a portion of capital to be repaid monthly. However, if you need that, then I'd strongly suggest that you shouldn't be in p2p. After 6 months of an FS loan, you would have received ~6% of your capital back if interest was paid monthly, this is peanuts compared to the ultimate risk of losing your capital; by this, I mean I'm pretty ambivalent between losing 100% of my capital vs 94%, to me, both are a total loss. I agree that if the capital was to be repaid monthly then the risk would be less, but then most of the loans would never be issued in the first place. How many property developers would take out a loan that needs to be steadily repaid over 6 months when they know their project will take over a year to complete? Likewise, why would someone hand over their classic car as security if they're having to repay the loan anyway; as mentioned by the previous poster, this is a pawn model where the car is payment, the only question is if it can be liquidated for sufficient funds to clear the debt. Basically, each platform has its pro It is not that I need a steady cashflow each month (although it does pay for my holidays!) the return of some of the capital and due interest each month does reduce the potential loss should the loan eventually default. I admit that the only platform that I know of which offers this is FE but I haven't checked each and everyone to see if it is the only one. You may be right in your assumption that very few borrowers would be attracted to this sort of loan and perhaps that is why FE appears to have ground to a halt. As for the suggestion that I should work out for myself the viability and chances that a loan will be repaid, either by the end of the term or by the end of an extension, do we "amateur" investors not expect the experts employed by the platform to do that on our behalf? I don't understand why you say that at the end of a 6 month loan I will have received 6% of my loan back - I am talking about loans where the borrower has to repay each month sufficient funds that by the end of the term both capital and interest is fully repaid. The interest will natually decrease month by month and the total return by the end of the loan will be far short of the 12% headline figure. I would have thought that many home and apartment builders would consider such loans if they were confident that completed houses/apartment would be sold througout the development enabling them to meet their loan obligations. I may be naive (I wasn't taught finance during my career as an electrical engineer!) - I am just a guy trying to get more return on my hard earned money than I can get from banks and building societies.
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Post by brightspark on Dec 2, 2018 17:22:59 GMT
Suggest you look at AC platform offering.
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Godanubis
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Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Dec 2, 2018 18:52:56 GMT
If you need a steady cashflow to supplement your income then I can understand why you'd like interest and a portion of capital to be repaid monthly. However, if you need that, then I'd strongly suggest that you shouldn't be in p2p. After 6 months of an FS loan, you would have received ~6% of your capital back if interest was paid monthly, this is peanuts compared to the ultimate risk of losing your capital; by this, I mean I'm pretty ambivalent between losing 100% of my capital vs 94%, to me, both are a total loss. I agree that if the capital was to be repaid monthly then the risk would be less, but then most of the loans would never be issued in the first place. How many property developers would take out a loan that needs to be steadily repaid over 6 months when they know their project will take over a year to complete? Likewise, why would someone hand over their classic car as security if they're having to repay the loan anyway; as mentioned by the previous poster, this is a pawn model where the car is payment, the only question is if it can be liquidated for sufficient funds to clear the debt. Basically, each platform has its pro It is not that I need a steady cashflow each month (although it does pay for my holidays!) the return of some of the capital and due interest each month does reduce the potential loss should the loan eventually default. I admit that the only platform that I know of which offers this is FE but I haven't checked each and everyone to see if it is the only one. You may be right in your assumption that very few borrowers would be attracted to this sort of loan and perhaps that is why FE appears to have ground to a halt. As for the suggestion that I should work out for myself the viability and chances that a loan will be repaid, either by the end of the term or by the end of an extension, do we "amateur" investors not expect the experts employed by the platform to do that on our behalf? I don't understand why you say that at the end of a 6 month loan I will have received 6% of my loan back - I am talking about loans where the borrower has to repay each month sufficient funds that by the end of the term both capital and interest is fully repaid. The interest will natually decrease month by month and the total return by the end of the loan will be far short of the 12% headline figure. I would have thought that many home and apartment builders would consider such loans if they were confident that completed houses/apartment would be sold througout the development enabling them to meet their loan obligations. I may be naive (I wasn't taught finance during my career as an electrical engineer!) - I am just a guy trying to get more return on my hard earned money than I can get from banks and building societies. The loans you want are not those of borrowers that don’t have funds to payback over 6 months they pay interest up front and hope to complete or at least increase value to allow continued development so you get interest either on selling or on final renewal or completion. You would need the longer term loans or mortgage type loans where properties are rented out and you get monthly interest. It is extremely complicated and there are many different stetups stick too bank current accounts for up to £10000 and get 3-5% or go to Welendus take monthly interest and capital as required for 8-15% Put smallest amounts in others till you get the lie of the land in each. Always better to diversify bot in platforms and loans within platforms. On loans that are reducing see FC that can be problematic too. To make sure you are not at risk of default always sell beforehand this only works well in loans where interest accumulates and can be sold with your part ie. FS the tax implication for you are really quite beneficial even selling at a moderate discount.
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mjc
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Post by mjc on Dec 2, 2018 19:03:57 GMT
It depends entirely on how much you have to invest if you have <£5000 Welendus gives a good return and pays monthly or use bank current accounts and get 3-5% if you have large amounts £50000+ and are prepared to work at fully diversifying and count EVERY loan as being 24 months no matter what it says then you make an excellent return make sure it is all in you FISA then FS fits the bill. Investing in P2P to make decent return requires either leaving it for years or the easier route that requires considerable management. Anything else is just gambling. The exception is Welendus as stated I have yet to find a downside to this friendly well performing platform other than it does not seem to be a model that would sustain high investor capital input. Allowed to grow at its own pace it I believe it would become the best performing P2P platform for everyone investors and borrowers. I put £50k into FS IFISA earlier this year, read the posts on this board, thought what a load of pessimists. Too late i realised they were right, or wish I’d seen them earlier. I don’t mind waiting 2 or 5 years, I expect my executors May have to pay IHT on the sums locked in the likes of Endurance boat, Park Homes, Impressionist paintings etc etc before they pay next to nothing back. Had up to 270 loans but, unknown to me of course many were to the same borrower. i just feel happier with Proplend, HNW, AC. And will try Welendus from the positive comments here.
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Godanubis
Member of DD Central
Anubis is known as the god of death and is the oldest and most popular of ancient Egyptian deities.
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Post by Godanubis on Dec 2, 2018 19:56:06 GMT
It depends entirely on how much you have to invest if you have <£5000 Welendus gives a good return and pays monthly or use bank current accounts and get 3-5% if you have large amounts £50000+ and are prepared to work at fully diversifying and count EVERY loan as being 24 months no matter what it says then you make an excellent return make sure it is all in you FISA then FS fits the bill. Investing in P2P to make decent return requires either leaving it for years or the easier route that requires considerable management. Anything else is just gambling. The exception is Welendus as stated I have yet to find a downside to this friendly well performing platform other than it does not seem to be a model that would sustain high investor capital input. Allowed to grow at its own pace it I believe it would become the best performing P2P platform for everyone investors and borrowers. I put £50k into FS IFISA earlier this year, read the posts on this board, thought what a load of pessimists. Too late i realised they were right, or wish I’d seen them earlier. I don’t mind waiting 2 or 5 years, I expect my executors May have to pay IHT on the sums locked in the likes of Endurance boat, Park Homes, Impressionist paintings etc etc before they pay next to nothing back. Had up to 270 loans but, unknown to me of course many were to the same borrower. i just feel happier with Proplend, HNW, AC. And will try Welendus from the positive comments here. You are right about same borrowers I have written to FS and I encourage others to do the same asking that borrowers have a unique number and any investments you have with that borrower are flagged not just for the loan you have but any subsequent loans offered and show your exposure over all their loans. Also the ability for you to adjust a note of your own to a loan part would be useful and not to challenging from an IT point of view rather than nice pictures let’s have something actually useful.
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arby
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Post by arby on Dec 2, 2018 20:03:26 GMT
I put £50k into FS IFISA earlier this year, read the posts on this board, thought what a load of pessimists. Too late i realised they were right, or wish I’d seen them earlier. I don’t mind waiting 2 or 5 years, I expect my executors May have to pay IHT on the sums locked in the likes of Endurance boat, Park Homes, Impressionist paintings etc etc before they pay next to nothing back. Had up to 270 loans but, unknown to me of course many were to the same borrower. i just feel happier with Proplend, HNW, AC. And will try Welendus from the positive comments here. You are right about same borrowers I have written to FS and I encourage others to do the same asking that borrowers have a unique number and any investments you have with that borrower are flagged not just for the loan you have but any subsequent loans offered and show your exposure over all their loans. Also the ability for you to adjust a note of your own to a loan part would be useful and not to challenging from an IT point of view rather than nice pictures let’s have something actually useful. I'd even settle for an indicator of when you are holding other tranches/facilities of the exact same loan!  Agree that a way to quickly aggregate exposure to the same borrowers should be integrated.
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mjc
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Post by mjc on Dec 3, 2018 6:50:14 GMT
I was also caught out, more than once, ie 2 and 5 p*rk h*mes, etc, buying into the same loan but different tranches because the “your holdings” figure was misleading.
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