p2pfan
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Post by p2pfan on Aug 9, 2022 21:11:53 GMT
Loanpad's 60 day notice account pays 4.2% p.a. and instant access bank accounts are edging towards 2% p.a., with 95 day notice ones already at 2.2% p.a. and rising.
Considering the very real risk of losing all or most of one's capital with a P2P platform, as many of us have experienced with one or more P2P networks in recent years, is the 4.2% from Loanpad worth the risk compared to the 100% safe savings with a FSCS-protected bank account?
I have to pay tax on earnings from both P2P investments and bank interest savings, so that reduces the gap in returns between the two even more as there's less tax to be paid on the lower bank interest earnings.
Which seems the smarter option?
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Post by stinge on Aug 10, 2022 8:00:54 GMT
Yes it's a quandary. I'm hoping that Loanpad will increase their rates again shortly, out of the blue, like they did last time. Otherwise, I suspect they will see customers removing funds for the 'safer option'. Personally,the £100 bonus I'm due next year, just tips the balance to hanging on in there, at the moment.
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littleoldlady
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Post by littleoldlady on Aug 10, 2022 9:53:25 GMT
We all have our own idea of a minimum differential to justify the risk. Even though I rate LP as the safest of all p2p platforms my own figure is 4%, meaning that LP would need to go north of 6% - if not now then shortly - and I can't see them doing that.
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Post by Badly Drawn Stickman on Aug 10, 2022 10:33:20 GMT
We all have our own idea of a minimum differential to justify the risk. Even though I rate LP as the safest of all p2p platforms my own figure is 4%, meaning that LP would need to go north of 6% - if not now then shortly - and I can't see them doing that. I suspect the problem they currently have is the only way to increase rates is from their own (not insubstantial) spread. That they may be reluctant is understandable. Maybe going forward they can negotiate a bigger overall figure and spare a bit for us. Loanpad has many good points and I like the model in principle. LTV has steadily crept up over time, so I am not sure it is as 'safe' as many seem to think. They have always quite openly admitted that they set the rate as competition to traditional savings, which always suggested one side of the deal was being a bit naive.
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Steerpike
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Post by Steerpike on Aug 10, 2022 11:26:53 GMT
I picked a loan at random 9978064, read the loan report, and looked online to check valuation.
Loanpad tranche is £150k for a property reasonably (IMO) valued at £275k 90d 54.55% which seems fine.
However, what strikes me as odd is that the total loan is £304k which is more than the current day one OMV of £300k and even exceeds the after refurbishment GDV 90d valuation.
This seems unusually risky for the subordinated Lending Partner, are they charging a very high rate or are they simply extremely confident in the borrower company?
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benaj
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Post by benaj on Aug 10, 2022 13:53:29 GMT
Why choosing one? Too many eggs can't fit one basket. Only "invests" the amount you are happy with. FCA says it would be unwise to invest more than 10% as a retail investor.
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ashtondav
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Post by ashtondav on Aug 11, 2022 14:01:06 GMT
Risk of loss is overstated by some. I started with big Z in 2005. The great financial crisis hammered my shares but the Zopa return was smooth as the Mediterranean Sea. By covid I was in Zopa, RS, AC, FC and LW. Made money on all of them. My only losses have been on Funding Secure and thankfully I never had much with them
a 100% premium to risk free seems ok to me. Especially in an isa where it is hard to get above 1% risk free without a tie in.
without doubt p2p has been the lowest volatility risk asset I have invested in over nearly 17 years now. That is ptretty damn impressive for a new asset class.
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littleoldlady
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Post by littleoldlady on Aug 11, 2022 15:54:56 GMT
Risk of loss is overstated by some. I started with big Z in 2005. The great financial crisis hammered my shares but the Zopa return was smooth as the Mediterranean Sea. By covid I was in Zopa, RS, AC, FC and LW. Made money on all of them. My only losses have been on Funding Secure and thankfully I never had much with them a 100% premium to risk free seems ok to me. Especially in an isa where it is hard to get above 1% risk free without a tie in. without doubt p2p has been the lowest volatility risk asset I have invested in over nearly 17 years now. That is pretty damn impressive for a new asset class. That's a sample size of one. You have either been clever or lucky. You will find plenty of others who have lost life changing amounts in this forum. A 100% premium to risk free depends on the level. Which would you prefer a risk free 0.1% or a slightly risky 0.2%?
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ashtondav
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Post by ashtondav on Aug 11, 2022 17:15:22 GMT
So, on what platforms over a decent period, say 3 years was money lost. I reckon it was the dodgy ones. Not one of the top four lost money for punters over a three year period. Maybe some very unlucky FC folks but no one else.
i May be a sample of one. I have 17 years of experience. Was I lucky in dodging the really bad ones? Maybe but I don’t think so. If you lost money in p2p you shouldn’t have been in it - and I agree too much dumb money was allowed access to a risk asset.
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nyneil
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Post by nyneil on Aug 11, 2022 17:52:18 GMT
So, on what platforms over a decent period, say 3 years was money lost. I reckon it was the dodgy ones. Not one of the top four lost money for punters over a three year period. Maybe some very unlucky FC folks but no one else. i May be a sample of one. I have 17 years of experience. Was I lucky in dodging the really bad ones? Maybe but I don’t think so. If you lost money in p2p you shouldn’t have been in it - and I agree too much dumb money was allowed access to a risk asset. So where did you buy your crystal ball? I want one. Did you predict Col, Lendy, FS & others well in advance, so you either didn't invest or managed to get out before you were locked in?
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benaj
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Post by benaj on Aug 11, 2022 17:54:27 GMT
, not so lucky for HONY.L.
Why there are not many great fund managers keen on p2p assets?
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Post by overthehill on Aug 11, 2022 17:58:32 GMT
Nobody knows their gains or losses from any platform until all their investments are redeemed/recovered and they have exited !
If your remaining invested capital is less than your overall gains then you know you can't make a loss.
Earning double figure % interest every year while default loans stack up has an unpredictable final profit/loss result . Not thinking of anyone in particular.
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Post by overthehill on Aug 11, 2022 19:13:33 GMT
, not so lucky for HONY.L. Why there are not many great fund managers keen on p2p assets?
I've no idea what this means perhaps because I've not been following this riveting thread too closely but the english grammar reminded me of what was trending on Twitter yesterday.
"Why no air defence"
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Greenwood2
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Post by Greenwood2 on Aug 11, 2022 19:30:01 GMT
So, on what platforms over a decent period, say 3 years was money lost. I reckon it was the dodgy ones. Not one of the top four lost money for punters over a three year period. Maybe some very unlucky FC folks but no one else. i May be a sample of one. I have 17 years of experience. Was I lucky in dodging the really bad ones? Maybe but I don’t think so. If you lost money in p2p you shouldn’t have been in it - and I agree too much dumb money was allowed access to a risk asset. Similarly I did pretty well also starting with Zopa in 2005, my big mistake was TC although I think I'm about at break even, but interest probably not a lot  . As said Zopa, RS, and lots of the other defunct or now in Administration platforms I got out with a good profit more by luck than judgement mainly. 
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littleoldlady
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Post by littleoldlady on Aug 12, 2022 8:19:45 GMT
So, on what platforms over a decent period, say 3 years was money lost. I reckon it was the dodgy ones. Not one of the top four lost money for punters over a three year period. Maybe some very unlucky FC folks but no one else. i May be a sample of one. I have 17 years of experience. Was I lucky in dodging the really bad ones? Maybe but I don’t think so. If you lost money in p2p you shouldn’t have been in it - and I agree too much dumb money was allowed access to a risk asset. The "top four"? On what basis? If you look back a few years on this forum you should find a popularity survey in which IIRC the top four all subsequently lost lenders' money. "If you lost money in p2p you shouldn’t have been in it". If you change "money" to "money you can't afford to lose" then I would agree, but IMHO some lenders have been the victims of fraud by dodgy platforms and have lost money through no fault of their own. I hope they could afford to lose it.
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. As said Zopa, RS, and lots of the other defunct or now in Administration platforms I got out with a good profit more by luck than judgement mainly. 