Monday, 27 May 2019

Nine months into P2P lending: update and general observations




Having invested in peer to peer lending now for about nine months with active investments in four platforms, I thought I would give a general update on what I’ve seen and experienced.  For each of the platforms there are subtle things I’ve noticed about either the platform or lending market it operates in, that I think is worthy of sharing. 

Starting with TruePillars, which was my first investment platform, the biggest thing I’ve noticed is investor activity has picked up a lot over the last few months.  This is noticeable from how quickly new loan auctions have taken up, quite often fully subscribed to the lowest rate on offer.  While this is good for TruePillars, it does mean you need to ensure you get your bid in early for a piece of the loan.  This activity is also driving down the overall returns investors are seeing.  TruePillars has recently acknowledged this and are aiming to increase the number of loans issued. Therefore, at the present time, TruePillars is best utilised by those keen to be actively involved on a daily basis in their peer to peer portfolio.

MoneySpot has been a consistent earner which has taken no time on my part.  One thing I recently noticed in the April monthly investor report was the average bad debt increased for the first time from what I can see going from 3.82% up to 4.85%.  Even with the increase in bad debts, however, the annualised monthly returns were comparable with previous months. This is something I intend to keep an eye on to ensure it doesn’t begin to impact on my overall returns. 

While I’ve only been investing in RateSetter a short time since February this year, I’ve seen a fairly rapid drop on interest rates by about 1% in the 5 year lending market.  This drop has occurred between March and April with the the interest rates dropping about 1.3%. Interest rates have come back a little, however they are still trading about 1% below my first investment.  Again I believe this is linked to the amount of money people have sitting there ready to invest, where you can commonly see over one million on the market for investment just in the five year leading market.  The other markets also having significant investor funds sitting there ready for investment.

While I’m still very new to Our Money Market, I can say that they have excellent customer service.  I had a couple of questions on the account and as such called Our Money Market.   My phone call was answered immediately by a real person who was extremely helpful. I really appreciated that this is one of the few occasions I’ve attempted to access customer service without first being directed through an automated service.  A second time I had some clarification questions, and given it was Thursday night, I emailed them through not expecting a response until the next day.  To my surprise Our Money Market responded that night.  While it is still early days with investing on this platform, I’ve been very impressed with their customer service.

These are just a few of the things I’ve picked up on my journey to date which I thought were noteworthy. As always keen to hear about your experiences whether they be good or bad and what platforms people are using.

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