Really stupid newbie question

Wot? I don't go to Ratesetter for 5% (apart from the occasional 3.6-4.0% holding period in the one month market). I start sniffing at 5.7+% 3yr and 6.3+% 5 year, but you have to watch for that and avoid Market Rate instructions, and NEVER succumb "rate to lend right now" suggestions on the RS site.
I'm not a grumpy old git for nothing.

PS Hi, greenslime

PPS All the platforms/loans have risks - some may be considerable if you stay the whole term of a loan. We all love to get 12-18%, but there are reasons for such rates. I do not subscribe to some people's mantra that 9-10% rates should be totally disregarded as inadequate. Each loan (and type of loan) needs to be assessed on its own terms. That may well be governed by how much of your time you feel can be well spent (or afforded) monitoring it all, and for Funding Circle (aka Follicloid Chancers) that is too much for me now for the fixed rates and lender fees imposed.

Welcome to the game - the usual advice applies - don't risk more than you can afford to lose. Spread yourself about and you probably won't lose at all, unless there is a worldwide economic catastrophe (.... damned bankers ... damned oil price rigging ... damned Chinese ... damned Chinese....  etc).


Finished. All I was going to do was reply to SteveT 's note.


Oh, give yourself a overall longterm target of attaining at least (before tax but after fees) 70% of the headline lending rates, then try to better it

Hi, I started off with FC as a newbie (granted when it was still running auctions) and believe it has a place in a P2P portfolio, maybe a fairer comparison if you had to invest your £100 today are the three Property loans on FC today which offer 7% (8%-1% fees) on LTV's between 50-70%, these are arguable lower risk than the MP's on MT today but 5% less risky I am not too sure?? Saying that you would be diversified across three loans rather than just a single lender on MT.

FC is now arguable set-up to support "dumb" money of people with no real time or interest in understanding P2P (or big flippers of CB or E loans). If I won the lottery and therefore were too busy enjoying life to bother logging on for ever auction I would chuck a chunk of cash in FC using autobid and be happy with their average expected rates but as I have time and need to make my money work as hard as possible then MT is getting a lot more of my small pot than FC.

You're getting forgetful in your old age. It's still being decontaminated after experiments with E-loans on FC...

It's all about relative risk. There's two main kinds - there's risk of the actual loan going south, and there's risk of the platform itself going all Trustbuddy on you.

As far as the first goes, some platforms have a safety net under you, some don't. FC doesn't, but if one does go south, they promise faithfully to phone the borrower up every now and then and nag them gently.
Others do.

Obviously, that's all theoretical in the event of the platform itself going south and that safety net being full of dead bodies already.

So - with all that in mind, which do YOU think...?
(FWIW, I'm MT-agnostic atm, and pretty much down property-only on FC. So neither of your examples would get my hundred quid.)

Most new platforms have had to offer higher rates to attract the first few customers. As the platforms become more established and discussed online and in newspapers they can reduce their rates for lenders. This has happened with FC as it is big, looks like a safe platform (not each loan, but the overall platform), and has some big investors, such as the UK government. On FC it is easy to invest in a large and diverse number of loans.

I haven't used MT but you often find on some of the newer platforms that several of the early loans are from related borrowers. My guess is you can easily find this sort of information in the MT section of this site. There are other sites such as SS which also offer 12% after fees, and there have been loans on FC which have had similar rates on secured loans, but most are not.

I started out with FC when they had no fees to attract investors.  I was foolish enough to trust their risk bands so put higher amounts in supposedly "safer" A+ companies.  They only had 3 risk bands at the time.  After about 18 months I had more A+ losses than any of the other bands and I never trusted their risk assessors again.  Consequently I reduced my investments and now only use them for short-term secured property loans.  IMHO loans secured on property or goods with an LTV of 65% or less are pretty safe and as you say I cannot see why anyone would fund an unsecured loan at 6% when 12% secured loans are available on MT,SS and FS which is where I am directing my spare £s.  Incidentally although considered safer platforms I am now almost completely out of Zopa and Ratesetter because of the low interest rates.

The only points I would add to the discussion above is that where you start out with P2P/P2B is probably not where you will end up at!

When I started the choices were limited to a few platforms in their first years so you went with them.

Now the choice is much larger, some I like, some I'm not so keen on. +90% of my P2P/P2B investments are through 8 platforms (19 separate accounts).

If I was starting out now I would invest a very small amount in a number of platforms and then decide on my preferences for the future. Only though experience (and reading on this forum) do you get an idea how friendly the website is, how good the communications are, how long you might suffer 'dead money', do you have to hover with a 'fastest finger', how time consuming is investing through each site ...... the list goes on.

Only with a bit of experience do you find out the best platforms for you .....and that is the important point, you need to feel comfortable with your investments, we are all different.