Best peer-to-peer lending platforms?

[Jordan12345]

Hi there,

Keen to get views on peer-to-peer lending as I'm looking to invest. Specifically keen to know:

• Have you earned good returns over time (what rate)
• Have you experienced losses (how much)
• Which platforms have you invested across (multiple in one go?)
• Where can I research P2P

Thanks

They are much higher risk than they are marketed. If you really, really want to invest and understand the risks. then go for one that is asset backed - Proplend or Lendinvest at least have some security beyond a promise to repay.

Frankly, unless it's money you can afford to lose, stay clear.

OP can you be a bit more specific? It's a bit like asking about investing in equities....the category is quite broad these days. Best starting point is to carefully consider your own skills, resources, risk profile, tax position, plus what role this would serve within a wider diversified portfolio of investments for you....that will guide realistic expectations/options with regard to your original questions.

Thanks for your comments guys. Why do you think they're much riskier than marketed @Hereward1332? I don't believe LendInvest operates as a P2P lender anymore - has different regs. Proplend, yeah, I think dealflow is limited though.

@Tugtupite, yep, fair point. I'd be looking at 10% portfolio perhaps, £10k to grow over a few years, probably consider an Innovative Finance ISA as there's a few kicking about. Have you much experience investing yourself? Do you use the auto-bid platforms (Funding Circle etc) or actively select loans...or even multiple platforms to lend across?

Why do you think they're much riskier than marketed

Because there is no return without risk. It's the risk premium.

Riskier than marketed because the adverts focus on the return, suggesting the product is safe because your investment is split between lots of borrowers and they won't all default.

They don't make it explicit enough that 1) You have no recourse to the Financial Services Compensation Scheme if the platform goes under 2) If platform disappears, you have multiple borrowers each owing you, say £10. It is not economical to pursue them all so you will lose everything. The platforms are not subject to the same capital requirements as banks so you really have no idea how safe they are.

Lendinvest is still a P2P lender. It has also issued bonds, but still sells P2P bridging loans.

Check out Abundance Investment. They are a peer-to-peer investment company rather than a lender. I have invested in a few projects with them, and they are regulated by the FCA:

www.abundanceinvestment.com

@Jordan12345 10% of total investment portfolio is a good maximum IMHO. And yes, I'm quite active in this area and invest across 9 platforms. I'm in a bit of a rush now but will try to send you a PM later.

I can appreciate the point about lack of attention paid to FSCS coverage, particularly for those who are inexperienced with investing in alternatives who may be unaware. My concerns more lie with operator health and diversification - I'd be inclined to diversify at a platform level and also across markets (and then naturally borrowers with the platforms that offer this autobid function). I'm aware that platforms are required by the FCA to have plans in place for insolvency, i.e, 3rd party to service run-off, but I suppose the issue is that this hasn't really been put into practice as there haven't been many platforms (if any) that have suffered this I believe. An economic downturn could prove effective, perhaps..

I do like the idea of trying a few platforms I must say.

Yes, Abundance has been going a while hasn't it - will check it out.

I have money invested in Funding Circle and Ratesetter. I have been happy with both.

Average return with Funding Circle is currently 7.6%. No losses so far.
Not sure how to calculate the interest rate with Ratesetter but on a £1500 investment made in March I have earned £28.84 interest. No losses.