it's legally binding just like any other lender and a collection agency chases
Peer to Peer Lending
- Thread starter HummuH1
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it's legally binding just like any other lender and a collection agency chases
Your debt will most likely get passed on to a collection agency much like any other loan.
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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
Thats an insane rate of return on a reasonably small sum. Are you quite sure you've profited £2.5k in just 3 years with an investment of just £5k?!
Soldato
I'm confused as to how £500 has becoming £5000 after making £2500 profit. 
Soldato
I'm confused as to how £500 has becoming £5000 after making £2500 profit.
I'm confused as to why somebody has to resort to taking out payday loans when they have the money to invest in Zopa!
I am confused as to why anybody would;
1) Invest with Zopa at all. I do not see how the risk profile offered for the return is any different to investing any any old fund through an investment bank.
2) Brag about investing with Zopa, with figures which even allowing huge risk profiles do not add up.
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Im assuming there will be TAX on any profits?
I like the sound of this. If I could spread some money (as much as I would be comfortable to lose) and yield around 8%, I'd be happy with that.
Interested in the tax implications of this. Can you use this mechanism to lend as a company, perhaps not as it's principal line of business?
Interested in the tax implications of this. Can you use this mechanism to lend as a company, perhaps not as it's principal line of business?
Soldato
I should clarify, the £2.5k is split between turnover and profit. Only about £1.2k is actual take out profit. It's a bit of a nightmare getting the money out but I tend to leave it there. I don't understand the hangup on risk. That 5K can be split between over 50 people or more. The ROI is fairly good, average around 5.5%. And if you've ever looked at Zopa for a loan, you'll know that you literally have to be super A+ credit wise to even get on their radar so the likelihood of someone defaulting is minimal.
P2P loans, will seriously take off in the future, of that I have no doubt
P2P loans, will seriously take off in the future, of that I have no doubt
For a retail OEIC it tends to be around £1000 lump or £50 monthly. There aren't any rules around it though and the shabbier ones run by banks rather than specialist investment houses tend to be much lower minimums, though marred by often unjustifiably high fees.
That being said, between the four funds I've been invested in over the last three years, I've had 34% return for around 1% annual fees. Not confident that will continue this year mind!
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Soldato
Of coures its taxable and iirc you cannot offset losses from one loan against interest from another.
Its like lots of things, a lot will not declare the tax, but should the tax man find out you have invested and not declared the income he won't be a happy bunny
Its like lots of things, a lot will not declare the tax, but should the tax man find out you have invested and not declared the income he won't be a happy bunny
Soldato
So £2500/3 years is £833.33 per year
£833.33 / 11% = £7575.76
Thats not £500 nor £5000, thats £7500 approx every year for 3, ok compounding will mean a little less technically would need to have been there at the start but your numbers are miles away from what you claim.
Soldato
I am just wondering now, are you saying you have put £5k in but it will be worth £7.5k when repaid?
Thats probably just about possible after 3 years since if you keep reinvesting the returns you will generate future interest again.
Of course its only worth £7.5k once every has paid every loan back, so its in fact more than 3 years its as long as the loans take to pay back.
Thats probably just about possible after 3 years since if you keep reinvesting the returns you will generate future interest again.
Of course its only worth £7.5k once every has paid every loan back, so its in fact more than 3 years its as long as the loans take to pay back.
If thats what he's saying then it's totally wrong to state he has made £2.5k profit, because he's yet to make anything of the sort in that scenario.
You can't work it out like that though in the traditional sense, as that is in itself not how it works.
i.e, it's not always been £5k on offer and it's not always been 11%. Even now, only £3.2k is loaned out, then there are fees, etc, etc.
i.e, it's not always been £5k on offer and it's not always been 11%. Even now, only £3.2k is loaned out, then there are fees, etc, etc.
Ok, in which case answer these two questions:
a) How much have you invested?
b) What is your total income after fees?
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