mv
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Post by mv on Apr 19, 2015 9:00:52 GMT
Imagine your perfect platform...
Money invested earns interest straight away. All loans are asset backed with tight security. Liquidity is easy and cost-free. A steady stream of loans and easy diversity if wanted. Excellent site functionality etc etc.
If a site was perfect for you, what is the minimum interest rate you would accept?
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bigfoot12
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Post by bigfoot12 on Apr 19, 2015 10:17:07 GMT
For short duration loans (less than 90 days) I would accept a very low rate, subject to all of your stipulations. But also I would need to be sure that I would get paid back on time (otherwise I might as well lend for longer and take the risk that I can sell when needed). So Ratesetter's 1 month loans don't work for me.
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blender
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Post by blender on Apr 19, 2015 11:05:58 GMT
Presumably this interest rate is after fees and losses but before tax?
The missing information is how much skill and effort is required. Do you throw the money in and just collect the interest or do you have to do any selection or management - how many hours invested?
If you say there are no losses, no work involved and perfect liquidity then it's like cash savings - except for the protection, which would not be necessary.
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mv
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Post by mv on Apr 19, 2015 12:28:58 GMT
Yes, after all fees but before tax.
For this scenario it's your perfect platform, not mine. If you like investing time and doing your DD work with that. If you prefer it to be more like a bank account that's fine too. I'm interested in the minimum rate where, with no significant risk, people would be prepared to park all their spare cash.
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Post by norfolkblue on Apr 19, 2015 13:54:40 GMT
I don't agree with the premise of the question.
There is no 'perfect' system which should have an associated rate.
Interest rate primarily depends on risk, effort/time required,and how tied up the money will be.
For a minimum effort product with a provision fund and fast (but not guaranteed) liquidity , I'd accept 5% . For a high effort platform with low-medium risk, but good liquidity I'd want 7.5%. If I'm completely committed to the investment with little chance to get out early, I'd want more. These factors will vary in importance from person to person.
I don't believe a zero effort p2p product that has no risk to capital, with instant liquidity - that's called savings.
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Post by lynnanthony on Apr 20, 2015 12:01:39 GMT
Yes, after all fees but before tax. For this scenario it's your perfect platform, not mine. If you like investing time and doing your DD work with that. If you prefer it to be more like a bank account that's fine too. I'm interested in the minimum rate where, with no significant risk, people would be prepared to park all their spare cash. I cannot help but feel that P2P is not and never will be a place for people "to park all their spare cash". It is and always will be (IMHO) a place to invest a proportion of one's savings.
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