PBL144 - 34 D*** R***, P*****, S***** (9%)

Of course, to be fair, it might mean something quite benign. I.e., the tenants are very good and treating the place as their own. Words!

First post.

Been 'lurking' for ages... watching SS, tempted by 12% and low default record. Started investing two months ago due to rate reductions elsewhere and a some 'sales' calls from an SS representative encouraging me to start using my long dormant account.

Okay... the sales calls worked.

Worked hard on the sparse (at that time) SM to build a suitably diverse list of >200 day loans: SM liquidity seemed excellent for long term loans so I pursued those, becoming an expert captcha solver and selling short term stuff ASAP which was near instantaneous. Very encouraging.

Used much advice from this forum, especially the DD stuff from 'C_D'; extremely informative and useful. What happened there? (No, don't answer.)

Got nervous when the SM went to nearly £4M with greatly reduced liquidity after the launch of PBL143 but this has recovered quickly, providing regained confidence.

And in the middle of that I see the first 9% loan turn up, looking no different from a multitude of 12% stuff I've been watching... I sort of wish I'd invested in SS earlier; hope I've not missed the 12% boat when the new, streamlined boat seems no less risky.

As an uninformed newbie, I will not be investing in 9% that seems on the surface to be no less risky than the 12% on offer elsewhere. I will however be watching closely to see how things go tomorrow when/if the 9% goes live. Only if the lower rate trend repeats and persists on SS and similar sites may I be persuaded to change my mind.

All in all, I like SS: their record, the website, the interest rates, the SM (and that they monitor and reply to this blog).

Thanks to all forum contributors... It's been a great (on-going) read and I look forward to the sequel(s).

Late to the discussion here but ITSM this is a small loan for saving stream just to test the water with lower interest rates to protect themselves. The lower interest rate is, I suspect, nothing to do with the default risk but simply the borrower was offered a lower rate loan from elsewhere and SS had to drop their rate to compete. Apart from people who get caught out with prefunding I believe the majority of this loan will be taken up by investors who have more capital than they can invest at normal 12% rates. If there aren't enough of these type of investors the SS platform takes on additional risk from having to hold onto the loan, reducing their float and opening the platform to the borrower default risk which we normally take on.

There is an additional very significant risk for those investors whose strategy involves offloading short dated loans in that we don't know what rates will be like in 4-5 months time. If they are higher than 9% then the secondary market for this loan could be poor.

If  you are comparing it to 12% available elsewhere you should consider that SS retain the interest for the initial term from the advance.  They have not answered a question as to whether they put this in a segregated client account but if they dothere is very low risk of any SS loan defaulting during that initial term.  So the main risk you have is platform failure which is uniform accross all loans in that period whether 12%, 9% or any other rate.

AIUI most other sites that offer high interest collect it from repayments and some at the end of term so they probably have a higher risk when all things considered than SS.

Once the initial term has expired, which it has on 30 or so loans, and/or the interest ceases to be funded in advance the risk becomes more uniform accross the platforms.

That made me smile. Is your forum about P2P also?

After some humming-and-hawing, I've decided against this loan too.  It appears to be competing on very much the same ground as AC's MLIA, where not disimilar small loans are occasionally available at 9%; but AC has the benefit of much better credit infomation up-front, better updating and a willingness to apply penalty interest on over-run.  In other words, at 12%, I'll put up with the defects of the SS platform, but at 9% I won't.