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RodCrosby

P2P

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Plenty of discussion over here:

http://p2pindependentforum.com/

But I agree, I would of thought quite a number of HPC folk would be into this. Is P2P enormous expansion a bubble forming or the future of banking. I suspect it is, as usual, somewhere in between.

I personally support the ventures fully as I would love nothing more than to see the high street banks squirm and cry as their industry finally modernises. However, like many I expect there will be many bumps and losses along the way.

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Ratesetter are offering £100 if you invest £1000 with them for a year at the moment. I thought it was worth dabbling for that. The "interest rate" has somewhat declined since they started it though. Even so if you can get a mate to introduce you, I think they get £50 for their troubles as well.

I have also been dabbling with Abundance - which focuses mainly on debentures in renewable energy installations rather than peer to peer (but has similar principles - and will also qualify for IFISA status later this year). I particularly like that because I like green energy tech, and you get a portion of your loan and interest back every six months. A very long term play in most cases though (up to 20 year loans).

Edited by StainlessSteelCat

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Ratesetter are offering £100 if you invest £1000 with them for a year at the moment. I thought it was worth dabbling for that. The "interest rate" has somewhat declined since they started it though. Even so if you can get a mate to introduce you, I think they get £50 for their troubles as well.

I have also been dabbling with Abundance - which is debentures in renewable energy installations rather than peer to peer (but has similar principles - and will also qualify for IFISA status later this year). I particularly like that because I like green energy tech, and you get a portion of your loan and interest back every six months. A very long term play in most cases thought (up to 20 year loans).

I'm a RateSetter lender and have been since early 2014. I predominantly lend in the 3 year market, now have about £44k with them and have an annualised return of 4.6% over that time. If anybody is looking for a link for the £100 if you invest £1,000 do PM me and I can send it to you. Full disclosure: As SSC says in addition to you getting £100 they would give me £50.

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I'm a RateSetter lender and have been since early 2014. I predominantly lend in the 3 year market, now have about £44k with them and have an annualised return of 4.6% over that time. If anybody is looking for a link for the £100 if you invest £1,000 do PM me and I can send it to you. Full disclosure: As SSC says in addition to you getting £100 they would give me £50.

Sorry mate, wish I'd known you were a Ratesetter lender last weekend as I'd have happily signed up via your link.

Edited by StainlessSteelCat

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Sorry mate, wish I'd known you were a Ratesetter lender last weekend as I'd have happily signed up via your link.

Not a problem at all. I only put it out there as the new customer getting £100 and the existing getting £50 seems like a win-win. Of course P2P is not covered by FSCS, capital is at risk etc but I've done my own research and am happy to have some of my capital in there. The RateSetter is easy to use and I've found their customer service to be top notch therefore happy to recommend. I know I'm happy with my 4.6% vs derisory savings accounts (with admittedly additional risk). In pounds, shilling and pence RateSetter have put £2,700 into my pocket. I'll take that.

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Ratesetter are offering £100 if you invest £1000 with them for a year at the moment. I thought it was worth dabbling for that. The "interest rate" has somewhat declined since they started it though. Even so if you can get a mate to introduce you, I think they get £50 for their troubles as well.

I have also been dabbling with Abundance - which focuses mainly on debentures in renewable energy installations rather than peer to peer (but has similar principles - and will also qualify for IFISA status later this year). I particularly like that because I like green energy tech, and you get a portion of your loan and interest back every six months. A very long term play in most cases though (up to 20 year loans).

How much interest are you getting from those bonds?

I see renewable energy from a shareholder perspective. The bonds get issued on mature projects once they're generating energy and income, and commonly serve to liberate shareholder funds to re-invest in the next project. The principle is, borrow at 3% for a 6% return. Renewable infrastructure funds, which might invest in both shares and bonds, are now an established form of long-term low-risk income investment.

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How much interest are you getting from those bonds?

I see renewable energy from a shareholder perspective. The bonds get issued on mature projects once they're generating energy and income, and commonly serve to liberate shareholder funds to re-invest in the next project. The principle is, borrow at 3% for a 6% return. Renewable infrastructure funds, which might invest in both shares and bonds, are now an established form of long-term low-risk income investment.

The interest is averaging out about 7% IRR or in more traditional terms closer to 4+% year. As I said, like some Ratesetter loans, the interest rate effectively goes up over time because interest is a (mostly) fixed amount (and paid on whole loan basis) while a portion of your loan is released every six months. Hence the difference between IRR and actual interest rate. In the final year, you can be getting the equivalent of 70% interest on the remaining loan because 90+% of it has been paid back already. Reinvest that portion of your returned loan and the interest - and its easy to see a considerable accumulative effect.

Unfortunately, there haven't been any variable rate debentures recently (that income qualifies as dividends rather than interest). Installation failure (maintenance usually budgeted for) and inflation (there are few inflation linked debentures now) are the key risks I'd say. But do your own research etc.

Some community energy schemes, but not abundance, do operate on a shareholder basis. If you live in the area, it can be a real win-win as you may end up benefiting in multiple ways; interest, money being spent on community projects, cheaper energy, and sticking it to big energy companies.

As I said, dabbling at the moment - but I find it very appealing on multiple levels.

Edited by StainlessSteelCat

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The best sites are: Moneything, Saving stream, Funding secure and ABLrate

These allow you to lend money backed by assets (including property) to people at typical rates of 12%!

As the loans are less than 70% LTV, if the person defaults the asset is seized and funds recouped

Seems to be working well so far

I'm not sure whether these qualify for the new 'inovative finance' ISA. I assume so as they are P2P lending sites. Any ideas anyone?

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The best sites are: Moneything, Saving stream, Funding secure and ABLrate

These allow you to lend money backed by assets (including property) to people at typical rates of 12%!

As the loans are less than 70% LTV, if the person defaults the asset is seized and funds recouped

Seems to be working well so far

I'm not sure whether these qualify for the new 'inovative finance' ISA. I assume so as they are P2P lending sites. Any ideas anyone?

Interesting. Will definitely take a look. Who determines the value of the asset btw? I'm sure it's not the case here, but I know I'm not the only one who remembers some of the overvalued off plan stuff in the mid 2000s to allow BTLers to expand their portfolios with effectively nothing down.

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I'm a RateSetter lender and have been since early 2014. I predominantly lend in the 3 year market, now have about £44k with them and have an annualised return of 4.6% over that time. If anybody is looking for a link for the £100 if you invest £1,000 do PM me and I can send it to you. Full disclosure: As SSC says in addition to you getting £100 they would give me £50.

hi,

I have recently come across your blog. Its brilliant BTW and has really inspired me to become FI ASAP.

My issue is I have a wife and three kids who always need something!

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Those who show any enthusiasm for p2p, are short on memory from the fancy financial instruments that blew up in 2007/8.

p2p are just packaging up loans that they have risk assessed, and then flog on to punters.

Just like the debt swaps from 2007/8, the returns, as well as your funds, will go down the pan without any warning. Why do you think the government don't give them backing through compensation schemes..._

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On 17/04/2016 at 9:56 AM, DiggerUK said:

Those who show any enthusiasm for p2p, are short on memory from the fancy financial instruments that blew up in 2007/8.

p2p are just packaging up loans that they have risk assessed, and then flog on to punters.

Yes, "Funding Collateralised Debt Obligations" doesn't have quite the same ring to it.

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I've put a few hundred pounds in Funding Circle.  It clearly comes with some major caveats.  There are some real dogs on there, such as EAs with cash flow problems and property developers/flippers looking for IO loans, and in the event of a recession the tide could go out pretty fast, but if you have the time to look for them there seem to be enough decent-looking businesses for adequate diversification.

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