Peer to peer lending?

Tilda

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Has anybody tried this?

A disclosure, I have £500 in Ratesetter and Zoppa.
It is so far working well. Given that the best paying current account only gives me 3% before tax these peer to peer sites seem pretty good.
I can loan out any sum on a monthly basis (currently around 3%) or I can lend out for longer periods for more (ie 5 years = 6%).

The websites if you want to do some reading is www.ratesetter.com and www.zopa.com

However, if it seems interesting and you have £1000 sat around and you want to get more than a puny bank gives you, if you use my referral link then we both get £50 if you lend out 1k before the 2nd March - so your 1k has already earned you 5% interest, on top of whatever you earn from lending that out.

ps. hopefully I have disclosed enough that people won't mind me posting this. I genuinely think these companies are interesting and provide a service lending to companies/people who need it.
 

CorNokZ

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In b4 Tilda gave all his monies to some guy who says he's getting a bunch in return when he is really a Nigerian Prince
 

Moriath

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Kicker right there.
It's also more risky than a bank.

If said small business goes broke etc. then you lose your money. If your gonna talk about money lending you should talk about the risks as well as the rewards
 

old.Tohtori

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Yeah meant it as a negative. If there's a "better deal", then usually it means you have some form of chance of getting f*cked.
 

Tilda

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It's also more risky than a bank.

If said small business goes broke etc. then you lose your money. If your gonna talk about money lending you should talk about the risks as well as the rewards

It might be, but ratesetter have a £12million contingency fund, have had 850 people total default on their loans and no customer in their history has lost money. If your loan person defaults, they pay you back from the contingency.
 

Moriath

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It might be, but ratesetter have a £12million contingency fund, have had 850 people total default on their loans and no customer in their history has lost money. If your loan person defaults, they pay you back from the contingency.
It's still a risk you didn't point out in your sales pitch.
 

Scouse

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It's still a risk you didn't point out in your sales pitch.

Warrants further reading tho.

There was something about it in new scientist a while back. Interesting but not for me - but it's not the risks. Too safe an investment for my liking ;)
 

GReaper

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One slightly annoying thing with these P2P lending sites - tax isn't deducted.
 

Moriath

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One slightly annoying thing with these P2P lending sites - tax isn't deducted.
Yeah you would have to start sending a tax return and keeping track of the interest and tax you need to pay.

Tbh 3% minus 40% is not far off a tax free isa level. But you have more risk and more hassle.
 

Hawkwind

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Is there an offshore version? Pay enough tax on savings in the UK and I haven't lived there for 13 years.
 

TdC

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you have your savings in the UK? nutter!
 

gunner440

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Warrants further reading tho.

There was something about it in new scientist a while back. Interesting but not for me - but it's not the risks. Too safe an investment for my liking ;)

Agree with Scouse. All this for 3% isn't worth it for me.

Depending on your circumstances in holding cash sums, it's actually better to have a 0% interest rate ;)
 

SilverHood

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My workplace gave me $25 vouchers to lend on Kiva.org about a year ago. I lent $50 to some farmer in Siera Leone, and $25 to a farmer in Mozambique. The Siera Leone farmer has paid back 70% of the loan, and the Moz' one about 25%. So go for it, but obviously not your entire savings!
 

Moriath

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My workplace gave me $25 vouchers to lend on Kiva.org about a year ago. I lent $50 to some farmer in Siera Leone, and $25 to a farmer in Mozambique. The Siera Leone farmer has paid back 70% of the loan, and the Moz' one about 25%. So go for it, but obviously not your entire savings!
Nice to be making big money for third world countries?
 

SilverHood

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Nice to be making big money for third world countries?

I don't make any money out of it, but once it's repaid I can lend it out again. Just saying that if farmers in Sierra Leone can pay back loans, you should be OK with peer to peer loans in the UK :)
 

old.Osy

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This has got pyramidal scheme written all over it - people actually consider doing this, and we wonder why americans have safety labels on most things.
 

Raven

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I wouldn't go as far as that...

But I would certainly want to know a lot more about it and how is behind it before signing up to it.
 

Moriath

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I think it's a standard lend to someone and they pay you back rather than them going to the bank for a loan or cause the bank won't lend to them.

Ito not a pyramid scheme. But it has the potential to go tits up big time if you go through a rough economic patch again.
 

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