Lendy (formally known as Saving Stream) offers investment in loans secured against property, with a max LTV (loan-to-value) of 70%. For borrowers (typically property related businesses) they provide bridging loans and development finance via the sister site Lendy Finance from 0.65% per month. They have grown quickly and are now one of the larger P2P platforms, with more than £266million lent out to date. Read more “Lendy Review (formally Saving Stream Review)”
Bondora is an Estonian based peer to peer lending platform that provides unsecured consumer loans. It was founded by Martin Rask, Mihkel Tasa and Partel Tomberg back in 2008 as isePankur and has grown to become one of the largest continental European platforms. Read more “Bondora Review”
What is Kiva?
Kiva is a non-profit organisation which provides micro finance loans to entrepreneurs in the developing world. It was founded in 2005 in San Francisco and has since funded around $950 million (£770 million) in loans. You lend in multiples of $25, but unlike most P2P lending sites you receive 0% interest. Borrowers may be charged interest by the local organisations that work on the ground (more on this below). Capital is at risk though historically defaults are low: the repayment rate is 97%. Once your loan repays you can either re-lend it, donate it to Kiva the charity, or withdraw the balance from Kiva. Read more “Kiva Review”
This posts compares 5 of the best hassle-free, automated P2P lending options.
Managing peer to peer investments and doing due diligence on individual investments can become almost like a part-time job, where the extra interest you make is just compensation for your time spent. Let’s make a theoretical example of two investors with a £15,000 investment pot:
Investor A: Manual P2P Investor. Investor A spends an hour and a half a week logging onto a few different sites and having a read through project proposals and valuations. Once or twice a week they have the frustration of ‘Fastest Finger First’, where a really popular loan is released at a certain time and they have to be as quick as lightning to get a share. They also waste some time manually doing transfers between platforms and their bank. There’s no economic downturn and their hard work pays off with an annualised return/XIRR of 10%, or £1,500. They pay 20% tax on anything above the £1,000 tax-free interest limit which reduces it to £1,400. Total hours spent over the year: 90.
Investor B: Hands-Off Investor. Investor B spends a few hours setting up their investment at the start of the year but then barely check it afterwards. They make an annualised return/XIRR of 7%, or £1,050. Treating them for tax in the same way as investor A, this comes down to £1,040. Total hours spent over the year: 10
In this particular example, net of tax investor A earns an additional £360 for 80 hours more work, or £4 an hour. So, if you want to use an automated, ‘hands-off’, ‘fire-and-forget’ platform, which is the best one? Read more “Which is the Best ‘Hands-Off’ P2P Investment Platform?”
So, you’ve got past the first hurdle of understanding your tax obligations as a UK investor on a continental European P2P lending platform. Now, before starting to look at individual websites, the next thing to research is how much you would lose in exchange rate fees or spreads. What’s the cheapest and most reliable way to transfer British pounds to Euros? Read more “How to Transfer Money to EU platforms”
Cornish peer to peer lending company, Folk2Folk, focus on the principle of ‘keeping it in the community’. Their goal is to create a personable and friendly experience for both borrowers and lenders with the chance to engage with real people rather than only through an online platform. One of the ways they do is through high-street outlets (Cornwall, Devon, Somerset and Gloucestershire), the only peer to peer lending platform to offer this type of service. Folk2Folk work on the premise of lower risk, high-security loans that benefit the borrower with a fair approach and lenders with attractive interest rates.
Folk2Folk originally grew out of law firm Parnalls of Launceston and to date have funded over £135 million of loans for projects such as farm diversification, property development, wedding venues and golf courses. They have grand ambitions to grow to ‘every local community across the UK‘. Read more “Folk2Folk Review”
Recently I came across a worked example which exemplified the power of investing early. It compared one investor who put away £2,000 per year between the ages of 19 and 25 then nothing after, and another who put away the same £2,000 each year from 26 to 65. Surprisingly, the younger investor generated more in interest by the age of 65 than the late starter! Read more “Compounding Returns & The Importance of Investing Early”
Assetz Capital is a mid-large sized peer-to-peer lending platform, having lent out over £214 million since its launch in March 2013. It specialises in property and small business lending. It offers a wide variety of ‘auto-pilot’ products and also manual selection of investments. Read more “Assetz Capital Review”
I’ve had a number of people contact me about this first time mistake, so I wanted to write a specific post to let you know the ‘trick’ before you make your first investment. With a few more clicks you can get a rate of return 0.1%-0.4% higher than the ‘Lend it now’ rate. Read more “Newbies: Don’t Invest in RateSetter Before Reading This Common Mistake”
Lending Works is a ‘hands-off’ investment platform which offers peer to peer personal loans. It targets lower risk consumers with higher credit ratings. It offers both a provision fund and additional insurance to protect against default on all its products. Since officially launching at the start of 2014, Lending Works has lent out over £39 million. Read more “Lending Works Review”