webwiz
Posts: 1,133
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Post by webwiz on Apr 16, 2015 17:19:32 GMT
I dipped my toes in the water with a small investment in Oct last year. My own investment has proceeded smoothly and I have withdrawn a tiny amount of interest to check that part out. However I am alarmed by the apparent impairment of 14 out of 83 loans on the platform and this is putting me off investing a serious amount. Can any of you guys & girls put my mind at rest?
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JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,323 
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Post by JamesFrance on Apr 16, 2015 17:50:22 GMT
In future I will be avoiding loans secured by debtors, assorted assets and personal guarantees without a charge over property. It is surprising how such things seem to be worthless after a few months of adverse trading.
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Post by oldnick on Apr 16, 2015 18:11:49 GMT
I dipped my toes in the water with a small investment in Oct last year. My own investment has proceeded smoothly and I have withdrawn a tiny amount of interest to check that part out. However I am alarmed by the apparent impairment of 14 out of 83 loans on the platform and this is putting me off investing a serious amount. Can any of you guys & girls put my mind at rest? Without wishing to appear unkind, this is the nature of the lending proposition. Some borrowers cannot, or choose not to, repay some or all of the loan. If the security stands up there will, eventually, be a return of funds, otherwise a full or partial loss is possible. The higher interest rates should, combined with a diversity of loans, compensate for the losses. The alternative is lower interest rates in exchange for more certainty. My response to the developing default rate is to look for the best kind of security - things that can't be carried away or 'evaporate' overnight, and to keep an eye out for slow payers ( a pet hate of mine).
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agent69
Member of DD Central
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Post by agent69 on Apr 16, 2015 18:19:54 GMT
Why is this on the private forum?
[ADMIN Note]
Thread has been moved as suggested.
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bugs4me
Member of DD Central
Posts: 1,845
Likes: 1,478
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Post by bugs4me on Apr 16, 2015 18:38:58 GMT
In future I will be avoiding loans secured by debtors, assorted assets and personal guarantees without a charge over property. It is surprising how such things seem to be worthless after a few months of adverse trading. Couldn't agree more and I've sold all of my holdings that are not secured on property. Even then I view valuations on commercial property with raised eyebrows. Still got a couple of nil holdings but with accrued interest which I've mentally written off.
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Post by mrclondon on Apr 16, 2015 18:53:36 GMT
I dipped my toes in the water with a small investment in Oct last year. My own investment has proceeded smoothly and I have withdrawn a tiny amount of interest to check that part out. However I am alarmed by the apparent impairment of 14 out of 83 loans on the platform and this is putting me off investing a serious amount. Can any of you guys & girls put my mind at rest? Its highly likely that there will be a total recovery of capital and accrued interest on most of those loans. Some will take years to resolve, and hence there is a chance that the acrued interest isn't covered in its entirity. A few will result in minimal recovery. Some of the "apparantly impaired" loans are relatively minor covenant breaches and should be disregarded. Many of the apparently impaired loans are the bridging loans from a single introducer who appeared to dump all his problems onto AC after dressing mutton up as lamb, and is no longer introducing loans to AC. Until the platform has been going for between 5 and 8 years there is simply insufficeint data to be able to draw any meaningful conclusions. Funding Circle is returning just under 6.5% as a long run average after defaults with similiar headline average rates of around 11% (guess on my part) as AC. In theory AC should return more than FC given the latter is prodominately unsecured loans. In the recent poll thread p2pindependentforum.com/thread/2479/where-choose-invest-most-money AC is currently a close 2nd behind ratesetter.
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Post by davee39 on Apr 16, 2015 18:53:55 GMT
It is not quite that bad. The problem loans hang around while the repaid loans go off the list.
I share your concerns though and am pursuing a strategy of modest investments across multiple loans.
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webwiz
Posts: 1,133
Likes: 210
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Post by webwiz on Apr 16, 2015 19:08:30 GMT
Why is this on the private forum? [ADMIN Note]
Thread has been moved as suggested. Simply because I was only interested in the views of existing investors.
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Post by mrclondon on Apr 16, 2015 19:19:36 GMT
Why is this on the private forum? [ADMIN Note]
Thread has been moved as suggested. Simply because I was only interested in the views of existing investors. Sorry for moving the thread ! However your concerns are common to all p2p platforms, impaired loans can and do take years to resolve, and with AC being a relatively new platform, existing AC lenders are not really in a position to be able to comment. TC and FC have been going longer but their models are not directly comparable .. TC is the closest and the experience of TC lenders might give you more insight in what to expect at AC over the next few years.
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Post by Deleted on Apr 17, 2015 9:37:48 GMT
Why is this on the private forum? [ADMIN Note]
Thread has been moved as suggested. Simply because I was only interested in the views of existing investors. But not all exisiting investors have joined or wish to join the private forum... 
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