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Post by gramsky on Apr 12, 2021 15:41:58 GMT
I have been investing in P2P Lending for several years and because of the failure of a couple of P2P sites am looking to diversify into other sites for this years ISA and started looking at CP until I discovered that it operates differently to the other sites I have invested in. The things that concern me are a) locking my money away for up to 2 years with no way of withdrawing it because there is no secondary market/ exchange for selling loans, b) interest is not paid until the end of the loan term. What are existing investors views on this and why did they invest with CP instead of other P2P companies? Thank you.
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Post by Ace on Apr 12, 2021 16:49:23 GMT
CP aren't perfect, but, IMO, they are the most professional of all the platforms I've tried or investigated.
It's not the case that all loans are bullet loans. Many do pay monthly interest, mostly the first tranche of multi-tranche loans.
A major problem with CP right now is that it's popularity makes it difficult to get one's funds deployed. However, this means that you end up with your funds split over a large number of loans which all have different repayment dates, so, once you've been investing there for over a year you tend to have several loans maturing each month, which makes it possible to access a portion of your funds regularly. The average loan length is only 13 months, so, once you're up and running you might expect around a thirteenth of your pot to be available each month (plus interest).
Also, CP have dropped some hints that there are new features to be introduced soon, so maybe an SM could be one of these.
Similar alternatives to CP that I'm currently happy with and also have an ISA are: Kuflink, CapitalRise, Proplend, Landlordinvest. And perhaps Loanpad for a lower risk/reward experience.
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mary
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Post by mary on Apr 12, 2021 18:31:38 GMT
I’m trying CP, and your observations are correct, as I see it, so I’m only playing for peanuts.
With interest rates so low and the poor track record of P2P as a whole, the risk/reward ratio at 7.x% is not sufficiently compelling to be worth the effort of due diligence - which CP do not make easy at all, publishing summary details and hiding all history those not invested in the project - this is big a Red Flag for me.
I’m putting proper money into a select few shares that pay 6%+ dividends and are highly liquid. BAT has announced its full dividends for the year ahead, paid quarterly 7.5% yield today. POLY pays 6.6%. PHNX pays 6.4%. Park ethical issues first.
VSL pays 9.3%, but much smaller and less liquid, but closer to P2P, very solid dividend record.
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ozboy
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Post by ozboy on Apr 12, 2021 20:28:46 GMT
I really don't understand anyone fannying around with P2P anymore. There's a number of Funds that will return at least what you'd get from P2P, and your Capital is relatively a whole lot safer. And you sleep like a baby at night.  |
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metoo
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Post by metoo on Apr 13, 2021 4:08:30 GMT
It's not the case that all loans are bullet loans. Many do pay monthly interest, mostly the first tranche of multi-tranche loans. Loans that repay principal only at term or in lump sums on partial sales are bullet loans. So far as I know, all CP loans are bullet loans, though some have retained interest paid out monthly.
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benaj
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Post by benaj on Apr 13, 2021 5:54:59 GMT
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Post by Ace on Apr 13, 2021 6:54:07 GMT
It's not the case that all loans are bullet loans. Many do pay monthly interest, mostly the first tranche of multi-tranche loans. Loans that repay principal only at term or in lump sums on partial sales are bullet loans. So far as I know, all CP loans are bullet loans, though some have retained interest paid out monthly. Yes, you are correct. Sorry, I made my point badly. I was replying to the poster's point "b) interest is not paid until the end of the loan term", which is not true for all loans on CP.
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Post by gramsky on Apr 13, 2021 8:40:18 GMT
I’m trying CP, and your observations are correct, as I see it, so I’m only playing for peanuts. With interest rates so low and the poor track record of P2P as a whole, the risk/reward ratio at 7.x% is not sufficiently compelling to be worth the effort of due diligence - which CP do not make easy at all, publishing summary details and hiding all history those not invested in the project - this is big a Red Flag for me. I’m putting proper money into a select few shares that pay 6%+ dividends and are highly liquid. BAT has announced its full dividends for the year ahead, paid quarterly 7.5% yield today. POLY pays 6.6%. PHNX pays 6.4%. Park ethical issues first. VSL pays 9.3%, but much smaller and less liquid, but closer to P2P, very solid dividend record. What is VSL?
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mary
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Post by mary on Apr 13, 2021 9:16:27 GMT
I’m trying CP, and your observations are correct, as I see it, so I’m only playing for peanuts. With interest rates so low and the poor track record of P2P as a whole, the risk/reward ratio at 7.x% is not sufficiently compelling to be worth the effort of due diligence - which CP do not make easy at all, publishing summary details and hiding all history those not invested in the project - this is big a Red Flag for me. I’m putting proper money into a select few shares that pay 6%+ dividends and are highly liquid. BAT has announced its full dividends for the year ahead, paid quarterly 7.5% yield today. POLY pays 6.6%. PHNX pays 6.4%. Park ethical issues first. VSL pays 9.3%, but much smaller and less liquid, but closer to P2P, very solid dividend record. What is VSL? VSL is the ticker symbol on LSE for VPC Specialty Investments. It’s an Investment Trust that started life as investing in funding P2P loans, but soon discovered that that was too risky, and now lends to companies lending to consumers, mainly in the US. The currency risk is hedged. Costs are high, dividends 9%+ and you can buy at a significant discount to NAV.
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jonno
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Post by jonno on Apr 13, 2021 9:29:25 GMT
VSL is the ticker symbol on LSE for VPC Specialty Investments. It’s an Investment Trust that started life as investing in funding P2P loans, but soon discovered that that was too risky, and now lends to companies lending to consumers, mainly in the US. The currency risk is hedged. Costs are high, dividends 9%+ and you can buy at a significant discount to NAV. I've held this for nearly three years now and it's performed well. It got hit by covid but has coped and responded well and recovered to pre-covid levels. Divi kept going too. Definitely worth a look (not advice!).
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Post by pauliee on Apr 13, 2021 13:27:59 GMT
There is also unbolted to add to that list, though with the legal case currently focusing on those corporate accounts, probably one to steer clear of
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Post by overthehill on Apr 14, 2021 11:16:30 GMT
What annoys me about CP is the length of time it takes to turn a pledge into a loan. E.g I have a pledge which I got around 23rd March. Deposited money a day later and I am still waiting (14/4/21 today) for the pledge to become a loan! This will obviously reduce the overall percentage earned. Unlike other platforms which pay interest immediately. It feels like they are getting progressively worse at their loan start date estimates. I've cancelled a pledge several times. It doesn't bother me but it would if I was putting large sums into a few loans. There is no reason for it now when loans fill in less than a minute.
CP can do no wrong at the moment but they can't get complacent. The lack of a secondary market can be seen as a business ploy to make it harder for investors to leave. I can't for the life of me work out why withdrawing money from their ISA still requires an email message. And what about certain recent borrowers who hopefully will be getting their toilet roll purchases monitored?
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cb25
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Post by cb25 on Apr 16, 2021 14:30:01 GMT
I've just had the money I pledged to loan 'land adjacent to 1.. Cambridge (5242CAMBRIDG)' returned as available cash (but is still currently showing in the list of my Not Started projects). Spoke to CP. They said the legals were taking longer than expected, so money was being returned to lenders and an email to follow. Loan will be back later.
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qlassa
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Post by qlassa on Aug 7, 2021 22:43:33 GMT
I’m trying CP, and your observations are correct, as I see it, so I’m only playing for peanuts. With interest rates so low and the poor track record of P2P as a whole, the risk/reward ratio at 7.x% is not sufficiently compelling to be worth the effort of due diligence - which CP do not make easy at all, publishing summary details and hiding all history those not invested in the project - this is big a Red Flag for me. I’m putting proper money into a select few shares that pay 6%+ dividends and are highly liquid. BAT has announced its full dividends for the year ahead, paid quarterly 7.5% yield today. POLY pays 6.6%. PHNX pays 6.4%. Park ethical issues first. VSL pays 9.3%, but much smaller and less liquid, but closer to P2P, very solid dividend record. Thanks for this, enlightened me to look at p2p fund stocks instead of way more illiquid platform loans..
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