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    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?
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    (Original post by OMGcapslock)
    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?
    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/sav...o-peer-lending. You can get 5%-6% with no risk in a high interest bank account though.
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    (Original post by blue12345)
    12% Guaranteed return with Saving Stream
    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.
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    (Original post by OMGcapslock)
    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?
    It's not low risk since it depends on individuals paying what they should and there's always a default rate (for mortgages the average is 6%, for this it will be higher) so personally speaking i don't consider returns of 5-8% to be enough of a risk premium.

    (Original post by Reue)
    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'd imagine from the description on their webpage that if we ever have a housing downturn your money's gone.
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    (Original post by blue12345)
    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.
    Are they paying you to say that? :lol: Anyone who puts 72k in P2P is a fool.
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    (Original post by blue12345)
    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.
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    (Original post by Reue)
    Lmao, I wonder how much of that is true.
    Well, I must say, if it is, they're doing very well for someone who's still waiting for an offer from UCL... I wouldn't mind having 72k as a student
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    (Original post by Reue)
    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.
    Thanks for posting.

    It does sound too good to be true. The loans are property backed and they have a provision fund to cover bad debts, yet they are claiming average returns significantly above the rates on similar sites......yeah, ok.

    edit: Also just noticed, the site has been active since Jan 2013 (so 3 yrs ago), and they've lent £96m and interested is paid monthly but investors have only earned £5m in interest (i.e. a 5.2% return). I know the principal being repaid over time means you earn less than 12% interest on the face value, but I wouldnt expect the achieved rate to be so low (its less than half the rate they're advertising)
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    (Original post by blue12345)
    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.
    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
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    (Original post by Death Grips)
    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
    They are very risky. The 'property' these loans are secured against are (or at least were when I looked last time) almost entirely boats.

    Ie: The things which sit in water, need maintenance & berthing fees and almost universally depreciate in value quicker than a car.
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    Sorry to bump, I registered and never came back to check this thread but thanks to everyone for their responses.

    (Original post by Snufkin)
    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/sav...o-peer-lending. You can get 5%-6% with no risk in a high interest bank account though.
    I have seen a few options for that level of interest, but the only options I've seen have very little flexibility. I want to be able to get at my cash without paying a penalty if possible.

    I have done quite a bit more research and FundingCircle.com do appear to have an outstanding reputation in this area. And with (I think) £200+ million of Government funds invested in them + over £1bn lent to others surely they're onto something.

    Will approach cautiously regardless, and will post back should I lose it all ;-)
 
 
 
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