Peer to peer lending a good option?

I don't have a lot of spare cash floating about but enough to save something each year. Given the current state of ISAs it seems I would actually be losing money by putting cash in the bank. However a friend introduced me to peer to peer lending the other day and claims that returns can be 5-7% (as opposed to 2 or 3% from a bank).

First of all, is this type of saving actually as low risk as some people are claiming? Does anyone have experience with sticking cash in a peer to peer lending website?

12% Guaranteed return with Saving Stream

I don't have a lot of spare cash floating about but enough to save something each year. Given the current state of ISAs it seems I would actually be losing money by putting cash in the bank. However a friend introduced me to peer to peer lending the other day and claims that returns can be 5-7% (as opposed to 2 or 3% from a bank).

First of all, is this type of saving actually as low risk as some people are claiming? Does anyone have experience with sticking cash in a peer to peer lending website?

I wouldnt touch them with a bargepole. Bunch of cowboys with questionable financial history and a complete disregard for data protection.

I was signed up (but not invested) with them a couple of years back when they accidentally emailed a couple of thousand of us with the personal details of everyone registered with them.

I'm sure they won't miss your measly £100 investment. Most of us at least put in a decent amount, I have 72k at the moment across my 2 accounts and I'm increasing that by about £1500 a month. Unfortunately, £160 million worth of other investment seems to disagree with you. It's not risky as the loan is at a maximum of 70% of the value of the property, and if they defaulted, Saving Stream would take control of and sell the property, with plenty of cushioning to pay investors back with the interest that was guaranteed. Can't lose.

I'm sure they won't miss your measly £100 investment. Most of us at least put in a decent amount, I have 72k at the moment across my 2 accounts and I'm increasing that by about £1500 a month. Unfortunately, £160 million worth of other investment seems to disagree with you. It's not risky as the loan is at a maximum of 70% of the value of the property, and if they defaulted, Saving Stream would take control of and sell the property, with plenty of cushioning to pay investors back with the interest that was guaranteed. Can't lose.

Lmao, I wonder how much of that is true.

I wouldnt touch them with a bargepole. Bunch of cowboys with questionable financial history and a complete disregard for data protection.

I was signed up (but not invested) with them a couple of years back when they accidentally emailed a couple of thousand of us with the personal details of everyone registered with them.

Also where are you getting that £160m figure from? It clearly says on their site they've lent £96m so far.

Also do you know how the risk return tradeoff works? if these guys are offering 12% average return, a rate that is 70% higher than similar sites, then the loans must be super risky

No it isn't low risk, but it still might be worth doing. This article explains it better than I could: http://www.moneysavingexpert.com/savings/peer-to-peer-lending. You can get 5%-6% with no risk in a high interest bank account though.