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Post by gterr on Jul 30, 2015 17:41:01 GMT
I am a newcomer to P2P. I've placed small amounts of money with AC, Money Thing and SS. I'm looking at RateSetter now, but could do with some guidance regarding selecting an interest rate. For instance, the market rate for a 5 year loan is currently at 6.1%. Do I accept this rate? (I wouldn't be interested in less.) If I request, say, 6.5% what are the chances of getting this matched with a borrower? Thanks.
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gnasher
Member of DD Central
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Post by gnasher on Jul 30, 2015 18:10:29 GMT
Hi gterr, and welcome to the forum.
RS rates do go up and down. The fun of RS, in so much as there is any fun, is to guess what the best rate is that you can get in a reasonable period. Rates on both the 3 and 5 year market vary within a band of up to 1% within a few days, even within 24 hours, not always but from time to time.
I have seen it said that an extra .1% is worth waiting for up to 16 days for on the 5 year market.
Open the full market link and look at the queue of money. Personlly I am happy to put my money behind up to say 250K of other money and see what happens, often at .1% to .3% over current rate. Normally it goes within a few days, but there is always the chance of the money being stranded if the market moves against you. Then you need to wait longer or move it down the queue.
Do not feel the need to bid below the current match rate - pointless - but lots of people do that as they are overly anxious to get their money out.
A few weeks ago we were getting 6.8 regularly, we are hoping to get back to something like that, but it may or may not happen.
So at 6.1 matching I would go for 6.2 or 6.3. Then there are the end of week and end of month spikes, which may or may not happen. Just hang around and watch and you will soon get a feel for the market. Also read old posts in this forum, lots of good stuff, oh and rubbish too. You will have to decide which is which.
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pom
Member of DD Central
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Post by pom on Jul 30, 2015 18:39:13 GMT
What gnasher said.... and generally don't panic and keep an eye on what else is around (eg Lending Works currently offer 6.4%, you might need to wait a week to get your money loaned out initially but much less effort).
For me I'm not prepared to lend out new capital at the rates on RS at the moment because it is so much lower than the 6.8% I got last month, but have decided I will take less for re-investments (if they ever match) just for lack of hassle factor, tho if matches continue to remain stubbornly below 6.4 I may start withdrawing my repayments also.
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Post by gterr on Jul 30, 2015 19:17:59 GMT
Cheers, gnasher and pom, and thanks for the welcome!
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Post by contangoandcash on Jul 30, 2015 21:02:08 GMT
Welcome along, third what gnasher said... take your time, try to gauge the range the markets are currently in and catch the high of the swing each day/week.. it can make a large difference. 5 year has suffered as they had a cashback offer 2 weeks ago that has brought the rates down and they have seemingly steadied nearly 1% lower than they were.. I think there's a hint that they're beginning to work higher again now. I too was getting 6.8% previously, I'm now lending short term until I think I can continue getting closer to that again. Good luck with it !
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Post by GSV3MIaC on Aug 1, 2015 14:27:18 GMT
And keep an eye on the rate differences between markets .. you may think you want to lend for 5 years, but if you can get 6.0% for 3 years (with an excellent chance rates will be higher by then) do you really want to tie up your money for an extra 2 years for an extra .2% (or whatever)? You might; I don't. Last week there were some periods where the 5 years rate was LOWER than the 3 year rate, which is plumb stupid.
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