My UK Peer to Peer Lending Journey so far..

It’s Christmas Eve so I thought I’d do a quick update on which platforms my Peer to Peer Lending money currently resides.

Platform Pie Chart Based on Investment

About a year ago, over 50% of my money was in the Ratesetter 5 year market.  I’m now pulling my money out as quickly as I can simply because the interest is relatively low (around 6%).  Unfortunately, Ratesetter have penalties for early withdrawal and no secondary market.

The Funding Circle (FC) proportion has also reduced because they have switched to fixed interest rates so you can no longer bid for a variable rate.  Generally the return on Funding Circle is now around 7% to 8%.  Another disadvantage of FC is that loans are unsecured and any defaults lower the actual return.

So which platforms have I increased my proportional share?  Well, there are three platforms that I now favour and they are all asset-based.  These are Money Thing, Funding Secure and Saving Stream.  Asset-based means the loan is secured against the asset.  The usual asset is property or land but can also be works of art, jewellery, super cars, boats, industrial machinery and shipping containers.

Saving Stream

Saving Stream is currently my number 1 choice with great track record (no losses so far) and typically one year loans at an interest of 12% with zero fees.

Saving Stream are continually refine their offering and are the only platform to offer Pre-Funding.  This allows the lender to specify how much they wish to lend on future ‘pipeline’ loans.  In other words you can bid or buy on the secondary market without the need to pay money into the platform up front.  However, once transactions are completed you are asked to settle up within 24 hours.

Anyway, here is wishing you all a very happy and peaceful Christmas and a prosperous New Year.  

Finally, if you haven't tried it, then why not consider including Peer to Peer Lending in your 2016 portfolio?   Trust me, Peer to Peer Lending is a great way to improve your financial prospects!  

  

Saving Stream: Steadily Increasing the Flow of Peer to Peer UK Property Loans!

Full Flood?

In my opinion, Saving Stream, incidentally my favourite PtP platform in the UK, is now more than a stream and is rapidly becoming a river in full flood of substantial, i.e. multi-million pound, UK property loans.

Although a relatively ‘new kid on the block’ in terms of Peer to Peer Lenders, Saving Stream is growing rapidly  and have recently moved into new premises in Southsea.

Saving stream loans are all asset-based, return 12% per annum (plus no fees) and are secured against property associated with the loan.  These bridging loans normally last for about 12 months.  Secured loans mean that, in the event of a default, there is a reasonable probability of getting the capital back once the associated property has been sold off. 

Secondary Market

Saving Stream also have a simple secondary market allowing loans to be sold at any time to other members on the platform.  This is great for those wishing to exit a loan early and also for those who wish to diversify, reducing their exposure from a single, larger loan to a number of smaller ones.

Note that the secondary market only operates at par.  This means there is no opportunity to sell at a premium or discount.  I like this approach and the simplicity of the SS secondary market.

Pre-Funding

The other fantastic thing about the Saving Stream platform is Pre-Funding.  Every other UK PtP platform informs you when a loan is expected to come on-line and then requires you to add sufficient funds to your account before you bid.  Often bidders fail to get anything because the ‘big players’ grab the lot in the first few seconds.  The unsuccessful bidder then has to decide whether to leave their cash on the platform (earning no interest) until the next loan or whether to withdraw the cash again. 

Pre-funding allows the bidder to define how much of each pipeline loan (ie those not yet ‘live’) that they wish to purchase.  At this point the lender doesn't pay anything.  Once the loan is ready to go live, saving stream email you to let you know what proportion of your bid has actually been allocated to you.  So, for example, if I bid for £1000 of a £1M loan and the total pre-funding bids are £2M then I only get half what I bid, i.e. £500.

Settling Up

At this point you can sell part of the new loan, if you have been allocated too much, and/or buy or sell parts of other loans on the secondary market.  Once this activity is complete the platform indicates exactly what you owe and SS ask you to settle up, ideally within 24 hours.

Generally, when a large, multimillion £ pound loan comes on stream, the secondary market opens up temporarily as lenders release older loans in order to fund the newer ones.  This is the time to diversify.  Normally the demand for a share in new or old loans outstrips supply so, on the Saving Stream platform, selling a loan is almost instantaneous where as it takes patience to successfully buy an existing loan. 

What Next?

What next for Saving Stream?  Well, I for one, hope they can continue to delight their rapidly expanding  Peer to Peer Lending audience in 2016.  This means they continue their excellent record of negotiating and managing new and existing loans so any future defaults result in no permanent losses for their lenders.