Defaults, Losses and the AC difference.

Don't put yourself down you may be inexperienced but not an idiot you are probably like most people on here just looking for a better return on your savings than you can get on the high street. P2P is relatively new so few people have accumulated vast amounts of knowledge about how each lender operates. As always where higher rates of return are concerned  there will be a higher rate of risk. IMHO AC offer an excellent compromise by in most cases seeking to back their offerings with tangible assets. However when something goes belly up it does not automatically mean you will get all of your investment back but over time you should get something back. With FC their historic data shows that they get back about 20% when loans fail. I would expect AC to achieve over time something better than 50% because of the securities it is holding.  Good luck with your investing.