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Post by Deleted on Jul 4, 2019 7:30:17 GMT
How low will you go on a P2P loan?
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Post by Ace on Jul 4, 2019 7:40:15 GMT
I'm presuming that this refers to P2x investments only. I'd obviously go much lower for FSCS protection.
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Post by gravitykillz on Jul 4, 2019 21:46:45 GMT
6%.
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aj
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Post by aj on Jul 5, 2019 6:43:25 GMT
7% for asset secured lending, though it would need to be a very low LTV for that. Below that, the risks aren't worth the reward.
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archie
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Post by archie on Jul 5, 2019 6:51:12 GMT
7% with the exception of Loanpad.
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mrk
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Post by mrk on Jul 5, 2019 11:03:46 GMT
I aim for at least 3% over inflation, so 6% right now. And that's after bad debt, so higher rate for individual loans, depending on their risk.
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benaj
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Post by benaj on Jul 5, 2019 11:27:10 GMT
I haven't cast my vote, but I hope I didn't misunderstand the OP question.
First, if the question is about the invididual loan lending rate, then I have seen rate could be as low as 1% in those blackbox accounts such as Z, FC or even RS, with overall advertised return over 3%+
If the OP question is about the platform return? then I had auto 1 year 4 % investment in Kuflink, but yielding 17% XIRR after cashback plus referral.
Other scenario, high individual loan rate over 10% with PF, but huge cash drag yield 1% XIRR ISA..
Worst, investment becomes illiquid and possibly negative return due to all kind of risks involved in p2p lending.
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Godanubis
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Post by Godanubis on Jul 5, 2019 11:45:49 GMT
Any positive return is a good result. So any platform that is likely to actually offer loans that after your DD look like the will consistantly give a positive outcome are the platforms of choice for the P2P portion of your portfolio. (most actually meet that criteria.)
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Post by Deleted on Jul 5, 2019 14:59:31 GMT
I really don't understand the question. Before investing... well nothing. No investment, no return. I must be missing something.
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Post by gravitykillz on Jul 5, 2019 18:12:38 GMT
I feel like watching Jerry Maguire.
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Post by df on Jul 5, 2019 18:51:16 GMT
I'm presuming that this refers to P2x investments only. I'd obviously go much lower for FSCS protection. The lowest p2p rate I've seen was 1.6% on RS Rolling and loans were filled presumably by MR investors.
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sarahcount
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Post by sarahcount on Jul 5, 2019 19:23:47 GMT
I really don't understand the question. Before investing... well nothing. No investment, no return. I must be missing something. I'm sure the question means what would the minimum advertised rate be for you to invest. Obviously that doesn't address the issues of what you expect to get back allowing for losses etc. Or what else you could do with the money. Clearly it would be foolish to invest at an advertised rate that was below what you could achieve with a loss-leading FSCS account.
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p2pfan
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Post by p2pfan on Aug 8, 2019 23:57:25 GMT
Considering the genuine rate of inflation (not the fiddled rate) tends to be circa 2.5%, plus defaults to factor in, plus taxes etc. I look for at least 7% or if there is a meaningful provision fund etc. 6.5%. Otherwise it's not worth the vast amount of time and effort required (most P2P platforms are full of inane red tape), the significant risks of defaults and sudden platform closures, and the illiquidity of most P2P loans.
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registerme
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Post by registerme on Aug 9, 2019 0:13:49 GMT
Headline rate - ((probability of default * loss on default) - (risk of platform failure * loss on platform failure) - opportunity cost - cost of capital - zero risk rate) expressed as an annual percentage rate) - risk of an interest rate rise + (some comfort value from any potential provision fund, expressed as an annual percentage rate) = ?
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aju
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Post by aju on Aug 9, 2019 13:45:27 GMT
Considering the genuine rate of inflation (not the fiddled rate) tends to be circa 2.5%, plus defaults to factor in, plus taxes etc. I look for at least 7% or if there is a meaningful provision fund etc. 6.5%. Otherwise it's not worth the vast amount of time and effort required (most P2P platforms are full of inane red tape), the significant risks of defaults and sudden platform closures, and the illiquidity of most P2P loans. You are not looking at Zopa then, mind you you would probably need to increase your .5% difference if it were Zopa. That all said I am definitely getting better than inflation by quite a way even with defaults although the last few months have been a bit hairy. Having sold loans on Zopa to move money across to RS it become acutely apparent that the sale even at 1% had underlying impacts due to the drag effect of selling off the most recent loans first. Mind you that worked in my favour when I wanted to retain as main PF covered loans I guess. What has become clear - even though we are now relending into the same products the old retained loans have a marked effect as they have all moved up the chain and are more ready to default whilst the the new loans interest level is not ready to cover them yet. So far there has been only a single month that wiped out the gains on the ISA products (these were the bigger sales) and the Invest products are all but PF covered loans now so but the next 3/4 months will be quite interesting. Looking at our whole investment in Zopa we are still getting the higher end of 4-5% using XIRR over the whole cycle of our loans. The recent sales do skew things slightly if I take an isolated 12 months but looking at the overall picture we are still very much on the upside than on the down side - still not as good as Zopa seems to predict.
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