P2P Investing

mikeh501 said:
Im kinda assuming its still a lot of little loans, but seems odd they all come at once. I might ask them. I get one of that size every couple of weeks. Just got my bonus a week or so ago.

Didnt know zopa was invite only right now. Id guess they are swimming in too much investor cash and dont have enough loan volumes right now. Backlog etc.

The ISA wrapper wont make any difference to your protection. Its just a tax wrapper which doesnt have any bearing on your investment risks.
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So I got another one of these reinvestment emails this morning from ratesetter which prompted me to ring them and ask how its possible.

Your reinvestment order XXXXXXXXXXXX for £10,186.11 at 2.7% in the Rolling market within your Everyday account has been matched. Thank you for investing with RateSetter.
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The above represents just over 50% of my investment as an FYI, so way too large to be a complete fluke that a large number of loans were repaid early.

So, I rang them and the answer is quite simple. Your investment isnt necessarily chopped down into small chunks to borrowers, its just as likely it went to a single individual borrower. This is what happened above. Basically 1 borrower repaid the whole loan early which then gave me my money back, and the system has now reinvested it.

The obvious question I asked is what happens if that 1 borrower who has 50% of my investment defaults. The simple answer is that the investor gets paid out by the provision fund, and you dont lose a penny. The provision fund ratesetter have is 120% of the total loan book, so unless there is a complete financial meltdown it should be OK. Its still an investment however! down as well as up etc etc.

The way to check is to goto your portfolio > investment > on loan. You can see from here who has your money and how much.

Ill be interested in zopa do this, and I think funding circle has a setting which ive got at 1% to ensure its diversified; although i dont believe they have a provision fund.
 
mikeh501 said:
Ill be interested in zopa do this, and I think funding circle has a setting which ive got at 1% to ensure its diversified; although i dont believe they have a provision fund.
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From December, Zopa are binning their Safeguard or provision fund so it's a little unclear what would happen if a loan after that time defaults. I suspect Zopa would attempt to recoup the money lent but ultimately, it’s a loss, Your loss!
 
Anyone got any tips on what divident yield to go for I think I read earlier in this thread you should go for 3% and lower I have some earnings been stacking up and looking to invest again on Property Partner.

Edit: Just to add from Property partner tax section on there website it got this

The 10% dividend tax rate will be abolished for UK taxpayers from April 2016, and a £5,000 annual dividend allowance will be introduced instead. Anyone who invests less than around £150k in share investments will pay no tax on their dividends (assuming a dividend yield of approximately 3%).
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So what happens if you have a property that over 3% dividend yield do you pay tax then and what about the new property being offered for 5% fixed income for 2 years?
 
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bingham67 said:
Anyone got any tips on what divident yield to go for I think I read earlier in this thread you should go for 3% and lower I have some earnings been stacking up and looking to invest again on Property Partner.

Edit: Just to add from Property partner tax section on there website it got this



So what happens if you have a property that over 3% dividend yield do you pay tax then and what about the new property being offered for 5% fixed income for 2 years?
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The yield isn't directly related to the tax you pay, they're just giving an example of how much you could have invested at 3% while remaining under the current £5k dividend allowance. The allowance reduces to £2k for 2018/19 tax year so then it'd only be ~£66k before you'd be over the allowance at 3%.

Usually a compromise between the yield and expected growth so depends on your outlook. The current 5% offer is very generous and has lead to the last few listings being 2x oversubscribed.
 
beh said:
The yield isn't directly related to the tax you pay, they're just giving an example of how much you could have invested at 3% while remaining under the current £5k dividend allowance. The allowance reduces to £2k for 2018/19 tax year so then it'd only be ~£66k before you'd be over the allowance at 3%.

Usually a compromise between the yield and expected growth so depends on your outlook. The current 5% offer is very generous and has lead to the last few listings being 2x oversubscribed.
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Thanks for the info
 
Anybody get the ratesetter letter outlining their recent wholesale loan faux pas.... bad form i rekon. ill be cashing out as the % rate isnt as good as others, and now this.
 
Dammit. Funding Circle are removing manual lending and introducing "Balanced" - ~7.5% or "Conservative" ~4.8% auto bidding options only.

Means you'll no longer be able to bid on high risk loans (band E) only (giving ~10% returns).
 
Just taken money out of Ratesetter which was my first P2P loan.

I had £1k in for 1 year, and after the £100 bonus got back £1135. Pretty happy with that but won't be putting anything back in.
 
Very briefly last week you could get 10% in the 1 year market.

It's worth noting that the RS provision fund is perhaps at its lowest ever % coverage currently.
 
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