Peer to Peer Lending

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HummuH1

HummuH1

HummuH1

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I don't know a lot about this and for those that know even less, obligatory Wiki link: http://en.wikipedia.org/wiki/Peer-to-peer_lending

Given the low amounts you can invest and the rate of returns achievable, it does look rather appealing, until you consider the risk involved although I think I'm right in saying some of the companies involved are getting FSA approval.

Has anyone dabbled in this at all?

In a fit of boredom and with the usual gripes about High Street investment rates, I'm tempted to give it a whirl.

Keen to see what others with more experience think.
 
We spoke about this in a recent Project Management course I had chance to do. It's the next best thing for investing money, and saves the hassel or companies relying on bank loans with huge interest rates. I'll see if I can dig up the website link we were given but, you can earn yourself a few pounds if you invest right. It's like gambling, with a nice return and it goes a long way.
 
I'm interested in this and have been looking at Zopa but not actually taken the plunge.

Still not totally sure how it all works but would be looking at depositing a couple of grand to see if it was as good as it sounds.

They talk of over 5% interest on the website.
 
I'd be worried of who they're lending my money to and whether or not I'll get it back. I doubt they cover lender's losses and if they're not FSA approved agencies that throws any hope of recourse via the FSCS straight out of the window. Interested to be proven wrong though! :)
 
I started this with Zopa around 3 years ago. Started with £500, its now £5k. The risk is fairly low as not all £5k is assigned to any one individual. In that time, I've profited circa £2.5k :)
 
Theophany said:
I'd be worried of who they're lending my money to and whether or not I'll get it back. I doubt they cover lender's losses and if they're not FSA approved agencies that throws any hope of recourse via the FSCS straight out of the window. Interested to be proven wrong though! :)
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With Zopa I believe they split your investment into smaller loans to various people to reduce the risk. Ie depost 2k and it's split up into £100 chunks etc for different people. Also has a rating system from memory so you can specify lending only to people with good reviews/history on the site I think?

No financial protection though afaik, if somebody does fail to repay there is little in the way of options.
 
Lucero said:
I started this with Zopa around 3 years ago. Started with £500, its now £5k. The risk is fairly low as not all £5k is assigned to any one individual. In that time, I've profited circa £2.5k :)
Click to expand...

Aannnndd I'm interested. :p Time to research Zopa :p
 
I did have one in zopa but I was lending broadly so it was pretty inconsequential, a background level of bad debt is built into their projected returns if I recall correctly
 
it's a while since i did it, but you decide what ratings you are willing to lend to. the default is something like not lending more than £10 to any individual from any other individual so exposure is low. There was a function where you could loan to specific people deliberately but not sure if that is still the case.
 
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