My review of several P2P lending platforms used recently
Nov 22, 2015 10:16:00 GMT
wiseclerk, locutus, and 2 more like this
Post by bob76 on Nov 22, 2015 10:16:00 GMT
I have invested in various platforms over the last 10 months (mainly in asset protected loans), so here is my review:
Funding Circle (FC)
The biggest one in the UK, by far. Can easily achieve 8-9% returns on asset secured loans (when including cashback). 90% of my investments is in those asset secured loans, and I have lost £35 on a non-asset backed one (but some money may be recovered).
So far, my actual return rate is about 9.7% after losses and fees, which is not bad at all.
True diversification is possible, I have loan parts from 200 different loans. Very hard to see which loans are from the same business, and therefore minimise the risk of investing too much against the same business, through various loans.
Website has not been really improved for a long time. They really need to work on a new version.
Given the true diversification possible, and the fact that many loans also have public funding, probably the safest platform, if used carefully.
Assets Capital (AC)
The nicest website. However, very few new loans actually coming to the platform, and the new ones are not that interesting relatively to other platforms (10% rate over 36 months for instance, with high LTVs). Actual return so far is about 11%, no losses made (or rather confirmed) yet, but return rate is dropping constantly given rates on new loans.
True diversification over 100 loans or more is hard if impossible.
The new cash account paying 3.5% was a good idea to get interest on idle money, but has been fully subscribed in a matter of hours. Therefore, there is still idle money. The Saving Stream solution of allowing for a deficit for a day is a better option.
If they can't bring more loans on board, at better rates and lower LTV, their competitive advantages is eroding slowly.
Rebuilding Society (ReBS)
They claim to have all loans with asset security, but when looking at the details, many just have a Personal Guarantee (PG), which is about useless. I initially bought many parts on the second market, paying a premium each time, and now sold everything I could, at a discount, so lost a little bit of money.
Website looks quite amateurish, and has not changed for a while. A risky platform in my opinion, with probably a very small team behind it.
Saving Stream (SS)
Some very good features, such as the ability to set targets on upcoming loans, and be able to have a funding deficit for a day (so no need to leave idle money). However, very few loans coming on board (maybe 4-5 a month at most), and any parts sold on the second market are gone in seconds, so it takes a long time to get some significant amount of money invested, and diversification is hard.
They should allow for loan parts to be sold on the second market at a premium, to make the second market more dynamic.
Probably some of the best new loans available, given the rate paid, LTV and loan securities.
Funding Secure (FS)
Lack of second market makes it difficult to have a significant amount on the platform. Also, loans coming on the platform at specific advertised times are gone in minutes (bought by people sitting in front of their computer at that time).
All loans are at 12% or more, and it's a pawnbroker service, so people really have to be careful with the LTV displayed (are the assets really worth that much?).
MoneyThing (MT)
Started investing on that platform, but then realized it's a very small company behind it (couple of permanent people in the UK, really), so won't invest much more on it, as I believe the platform itself is risky, and the rates (12%) are not worth the additional risk (can find better elsewhere). No second market, so not possible to sell a loan part before its completion.
Funding Circle (FC)
The biggest one in the UK, by far. Can easily achieve 8-9% returns on asset secured loans (when including cashback). 90% of my investments is in those asset secured loans, and I have lost £35 on a non-asset backed one (but some money may be recovered).
So far, my actual return rate is about 9.7% after losses and fees, which is not bad at all.
True diversification is possible, I have loan parts from 200 different loans. Very hard to see which loans are from the same business, and therefore minimise the risk of investing too much against the same business, through various loans.
Website has not been really improved for a long time. They really need to work on a new version.
Given the true diversification possible, and the fact that many loans also have public funding, probably the safest platform, if used carefully.
Assets Capital (AC)
The nicest website. However, very few new loans actually coming to the platform, and the new ones are not that interesting relatively to other platforms (10% rate over 36 months for instance, with high LTVs). Actual return so far is about 11%, no losses made (or rather confirmed) yet, but return rate is dropping constantly given rates on new loans.
True diversification over 100 loans or more is hard if impossible.
The new cash account paying 3.5% was a good idea to get interest on idle money, but has been fully subscribed in a matter of hours. Therefore, there is still idle money. The Saving Stream solution of allowing for a deficit for a day is a better option.
If they can't bring more loans on board, at better rates and lower LTV, their competitive advantages is eroding slowly.
Rebuilding Society (ReBS)
They claim to have all loans with asset security, but when looking at the details, many just have a Personal Guarantee (PG), which is about useless. I initially bought many parts on the second market, paying a premium each time, and now sold everything I could, at a discount, so lost a little bit of money.
Website looks quite amateurish, and has not changed for a while. A risky platform in my opinion, with probably a very small team behind it.
Saving Stream (SS)
Some very good features, such as the ability to set targets on upcoming loans, and be able to have a funding deficit for a day (so no need to leave idle money). However, very few loans coming on board (maybe 4-5 a month at most), and any parts sold on the second market are gone in seconds, so it takes a long time to get some significant amount of money invested, and diversification is hard.
They should allow for loan parts to be sold on the second market at a premium, to make the second market more dynamic.
Probably some of the best new loans available, given the rate paid, LTV and loan securities.
Funding Secure (FS)
Lack of second market makes it difficult to have a significant amount on the platform. Also, loans coming on the platform at specific advertised times are gone in minutes (bought by people sitting in front of their computer at that time).
All loans are at 12% or more, and it's a pawnbroker service, so people really have to be careful with the LTV displayed (are the assets really worth that much?).
MoneyThing (MT)
Started investing on that platform, but then realized it's a very small company behind it (couple of permanent people in the UK, really), so won't invest much more on it, as I believe the platform itself is risky, and the rates (12%) are not worth the additional risk (can find better elsewhere). No second market, so not possible to sell a loan part before its completion.
