Social & P2P Lending
Posted: November 19th, 2016, 2:58 pm
Hi all,
Hopefully this is in the right place, I always thought this was a useful board on TMF, hope others think so too.
I lend with Zopa and recently posted a link on TMF about risk. A lot of people talk about risk and there are
many that I talk to that don't like ANY risk. But I think its a risk leaving money at 0.1% - 2% interest.
I have recently been investigating Zopa risk, and it seems that they are now lending to more risky customers
to help generate business. A lot of this now comes from institutions who provide over 50% of the lending funds.
Apparently they park money there whilst they think about what to do with it.
As for my personal risk, I am slowly changing from safeguard to non safeguarded lending. Safeguard currently
gives rates of 5%, whilst non safeguard, again currently gives a projected 7%. How risky is it? I don't know but
I do know that the projections on default are not correct. Actual lending rates go up as high as 25%! but my average
rate is at 12.%. I only started lending in the non-safeguard category a few months ago when it became available and have been
keeping my eye on defaults. I currently have 63% of my funds non safeguarded, which is slowly rising when safeguard
capital returns. My annualised rate for defaults is 0.11%(% of total lending) and has been quite steady for 6 months. That means that instead
of the projected 7% I am actually getting over 8% (safeguard/nonsafeguard) and on the non safeguard alone over 10%.
I'm currently quite happy with the return, but I do a full assessment of the lending every month, mainly checking for
rising defaults, which hasn't happened so far.
I'd be interested to hear others assessment of their risk. I have been reluctant to use other lending platforms but think
that it may be better to spread risk that way too, stories about other platforms would be interesting
Serpenteer
Hopefully this is in the right place, I always thought this was a useful board on TMF, hope others think so too.
I lend with Zopa and recently posted a link on TMF about risk. A lot of people talk about risk and there are
many that I talk to that don't like ANY risk. But I think its a risk leaving money at 0.1% - 2% interest.
I have recently been investigating Zopa risk, and it seems that they are now lending to more risky customers
to help generate business. A lot of this now comes from institutions who provide over 50% of the lending funds.
Apparently they park money there whilst they think about what to do with it.
As for my personal risk, I am slowly changing from safeguard to non safeguarded lending. Safeguard currently
gives rates of 5%, whilst non safeguard, again currently gives a projected 7%. How risky is it? I don't know but
I do know that the projections on default are not correct. Actual lending rates go up as high as 25%! but my average
rate is at 12.%. I only started lending in the non-safeguard category a few months ago when it became available and have been
keeping my eye on defaults. I currently have 63% of my funds non safeguarded, which is slowly rising when safeguard
capital returns. My annualised rate for defaults is 0.11%(% of total lending) and has been quite steady for 6 months. That means that instead
of the projected 7% I am actually getting over 8% (safeguard/nonsafeguard) and on the non safeguard alone over 10%.
I'm currently quite happy with the return, but I do a full assessment of the lending every month, mainly checking for
rising defaults, which hasn't happened so far.
I'd be interested to hear others assessment of their risk. I have been reluctant to use other lending platforms but think
that it may be better to spread risk that way too, stories about other platforms would be interesting
Serpenteer