Ideas Farm: Can value take the momentum mantle?

I don't think the return pays off for the risk and hassle. A lot of the property loans I invested in were A rated, 8-12% over 6-12 months, and then you never saw the money ever again.

I regularly get (several times a year) a letter addressed to someone I don't know, addressed to a company that closed down nearly 20 years ago and I "return to sender" with pleas to remove my address from their database but nothing seems to work. Break even sucks because of inflation, but it's better than nothing. So, I know there have been a few posts over the last few years warning people about lending money via Funding Circle, but I just wanted to share my story in case it helps others... and in the hope someone can help me! By using our Services or clicking I agree, you agree to our use of cookies. One interesting question though....if one left the auto-rebuy thing on forever, would one’s loan book tend toward to 100% defaults or steady returns? The fact that there are fees on the investor in P2P is laughable when they are the one taking all the risk and they are the one creaming low single digits in interest, out of decent double digit interest charged by the P2P. - They don't allow people to sell "dirty loans" to other users. Full access for just £3.37 a week: • Tips and recommendations - to beat the market • Portfolio clinic & Mr Bearbull - build a well-planned portfolio What I do contend is that the return is nowhere near concordant with the actual risk.

Sadly many of these "dirty loans" are effectively defaults, just taking ages to be declared as that.

My annual return has been declining slowly over the last few years, so over the weekend I decided to sell all my loans.

You're taking literally all the risk (you're the lender, not the P2P), for a really terrible return.

As well as throwing this out as a cautionary tale, my questions are: Am I likely to ever get back the missing £3,500? HOLD. I have had almost all my loans settled and there is just a small tail mostly of the fully defaulted loans in Recoveries, while the ones with just a small arrears etc have been cleared.

Overall I still made about 3%, so it wasn't the end of the world, but I really don't think Funding Circle did proper due diligence on their loans (the ratings seemed to be nonsense), and they didn't know how to handle companies that were not paying.
They make money on up-front fees, so while they are of course minded as to the performance of the loan over time they have already made their money after one payment, and on they move to the next one. I assumed a big chunk of the locked money is a default, I still slowly get money back from the recoveries so every couple months I take out whatever I can. Bizarre that MSE pushes P2P lending harder than index investing.

Not surprising. Their appetite for risk, in my experience, is without parallel in the UK market.

The double digit interest for borrowers would be ok the higher risk end where more defaults are expected naturally, so the idea is a balanced spread, waiting for maturity of the loans to take money out, or constantly reinvesting (but then delaying the eventual time of withdrawl). Exactly.

Great service and great people to … I don't doubt that people have made money from it. I've come across individuals invested in P2P who didn't know what a bad debt provision was, or if they did, that it is very easy to manipulate reported stats. No Problems. I have never withdrawn money. You just have to patiently wait on the remainder to be repaid as normal (assuming this happens). Targeting returns from 4% – 6.5% on their balanced investment options, from their Funding Circle UK office by p roviding Peer to Peer loans to property developers and small businesses throughout the UK. It'll take a while to get out, but you'll definitely end up with a lot more than £56. Tip Updates . More on Tip Updates. I had a similar experience about three years back albeit with a smaller total investment.

They make money on up-front fees, so while they are of course minded as to the performance of the loan over time they have already made their money after one payment, and on they move to the next one. Of course, I had previously been gaining interest every month, but it basically ate into the profits.

and enjoy unlimited access to the following: Charge pertained to US investigation into the marketing of the group’s opioid addiction drug, John Baron reminds readers of the importance of portfolio rebalancing and highlights some contrarian calls, • Tips and recommendations - to beat the market • Portfolio clinic & Mr Bearbull - build a well-planned portfolio • Expert tools - track and manage investments effortlessly• Plus free delivery to your home or office. and enjoy unlimited access to the following: Charge pertained to US investigation into the marketing of the group’s opioid addiction drug, John Baron reminds readers of the importance of portfolio rebalancing and highlights some contrarian calls, • Tips and recommendations - to beat the market • Portfolio clinic & Mr Bearbull - build a well-planned portfolio • Expert tools - track and manage investments effortlessly• Plus free delivery to your home or office. If they could get a loan from a bank they'd probably have done it. You can make money from all sorts of high risk investments.

... Our loan finished this month and I just want to say a massive thank you to the Funding Circle for helping us achieve our goals.

Charge pertained to US investigation into the marketing of the group’s opioid addiction drug.

Funding Circle seem to be battling out with Virgin Media for the most badly targeted direct mail marketing. All rights reserved. New comments cannot be posted and votes cannot be cast, More posts from the UKPersonalFinance community, Discuss, learn and request help on how to obtain, budget, protect, save and invest your money in the UK, Press J to jump to the feed.
My little problem is that Funding Circle are activating their claim against the personal guarantee that I signed when taking out a loan as part of a now dissolved limited business. Loads of A and B rated loans started defaulting, and I was losing money every month. GB Group's profits jump .

Tip Updates . Pretty poor return for 4 years, but not the worst. - I personally believe these platforms try to fight until the last minute before declaring a loan as a default (so it doesn't raise default rates statistics) so I feel like there is some short of stats makeup here.

Press question mark to learn the rest of the keyboard shortcuts. On Funding Circle before everything started defaulting I was making 10-12%. Funding Circle was established in 2010 and filled in a great gap in the market.

This of course means that they should expect less returns than if they waited until maturity because they are now lending their money for a shorter period of time.

Basically what happens (in case anyone from not using FC/P2P lending wonders) is that: - When you cash out you're selling your loan parts to other users/lenders --> Delay to cash out as this depends in offer/demand.

To be fair, at least he didn't lose money.

It would not surprise me if actual, strictly defined delinquencies were 15-20%+. Not a good sign.

When I went to sell my loans, I find out that only £28,056 is eligible to sell, as the rest are to companies who have missed payments.

I apply a simple test to business propositions: once mothers are talking about their involvement in the scheme while waiting outside at school pick-up, the smart money has left town and new entrants are probably going to be disappointed.