funding circle problems

Professional lenders (banks) aim for a 3-40% return typically and aim for delinquencies of c.5% (depending on your definition of 'delinquent'/bad debt) in their demographic. It's a bubble and it's going to burst. If they could get a loan from a bank they'd probably have done it. Funding Circle seem to be battling out with Virgin Media for the most badly targeted direct mail marketing. You also need to understand nearly record IVAs and DMPs (both not really regulated at the moment) and the direction that's going in (not down!). Exactly. Pretty poor return for 4 years, but not the worst.

So banks get the first pick, then out of those that are left some end up on P2P platforms. I don't think the return pays off for the risk and hassle. A lot of the property loans I invested in were A rated, 8-12% over 6-12 months, and then you never saw the money ever again. Sounds like a recipe for decreasing lending standards to increase the money "under management", trebles all round, and i'll be long-gone before the shit hits the fan.

Funding Circle’s business model differs to most; they have no skin in the game. Not the quickest of application process but happy with the outcome and will use again for sure. Loads of A and B rated loans started defaulting, and I was losing money every month.

If an investment looks to good to be true, just remind yourself that if it were legit Goldmans would have maxed that shit out and not left a penny for retail investors to get involved.

My little problem is that Funding Circle are activating their claim against the personal guarantee that I signed when taking out a loan as part of a now dissolved limited business. What I do contend is that the return is nowhere near concordant with the actual risk. Not surprising. Overall I still made about 3%, so it wasn't the end of the world, but I really don't think Funding Circle did proper due diligence on their loans (the ratings seemed to be nonsense), and they didn't know how to handle companies that were not paying. Ideas Farm: Can value take the momentum mantle? Tip Updates . Some loans received no payments for months or years without updates from Funding Circle, other than occasionally saying something like "we have asked them for money and have downgraded the loan meaning you cannot sell it now". What are your thoughts on Ratesetter at present?

The double digit interest for borrowers would be ok the higher risk end where more defaults are expected naturally, so the idea is a balanced spread, waiting for maturity of the loans to take money out, or constantly reinvesting (but then delaying the eventual time of withdrawl). © The Financial Times Limited 2020. I had a similar experience, but thankfully with less invested. The recovery process it takes months/years so you get something back (very little) but you're kinda forced to stay in the platform and slowly recover some money by cents and regularly have to login to cash it out. I still have a couple £k with their ISA for diversification, but I wouldn't put a single penny on P2P lending nowadays as the actual returns are way lower than announced when you effectively try to cash out + cashing out takes way longer than used to.

The fact that there are fees on the investor in P2P is laughable when they are the one taking all the risk and they are the one creaming low single digits in interest, out of decent double digit interest charged by the P2P. Had the same experience with the property loans and am still owed £800 in ones that went bad (despite that still managed a return of something like 6%). I apply a simple test to business propositions: once mothers are talking about their involvement in the scheme while waiting outside at school pick-up, the smart money has left town and new entrants are probably going to be disappointed. That's the kind of risk most are worried about. So, I went to sell my loans in the hope of getting back £31,598.77. The property loans were an absolute joke and I'm not surprised FC pulled out of property because they obviously couldn't handle it. Cookies help us deliver our Services.

SELL. © The Financial Times Limited 2020. Basically what happens (in case anyone from not using FC/P2P lending wonders) is that: - When you cash out you're selling your loan parts to other users/lenders --> Delay to cash out as this depends in offer/demand. Break even sucks because of inflation, but it's better than nothing. The Financial Times and its journalism are subject to a self-regulation regime under the FT Editorial Code of Practice: www.ft.com/editorialcode.

This served an important need. You can make money from all sorts of high risk investments. If fundingcircle lending opportunities was low risk then banks would be all over it, but they’re not and they’re significantly better at calculating risk than most individuals. ... Our loan finished this month and I just want to say a massive thank you to the Funding Circle for helping us achieve our goals. Were the property loans all scams or what I wonder. Tip Updates . The Financial Times and its journalism are subject to a self-regulation regime under the FT Editorial Code of Practice: www.ft.com/editorialcode. When I went to sell my loans, I find out that only £28,056 is eligible to sell, as the rest are to companies who have missed payments. GB Group's profits jump .

Useful. Funding Circle is one of the largest Peer to Peer lenders with operations in 4 countries..

So you'll have to wait for some non-zero proportion of them to repay their loans and stop recycling the money that accumulates.

All rights reserved. It'll take a while to get out, but you'll definitely end up with a lot more than £56. So I still have those in the platform, receiving tiny recovery payments in some cases. Tip Updates . It is definitely a frustration because like in your case, the money I had to wait on largely represented my profits. If the loan has missing payments or similar... you're stuck with it. Not a good sign. I've come across individuals invested in P2P who didn't know what a bad debt provision was. So, to cut a long story short, after 4 years, I will have earned £56 (or 0.2%).

All rights reserved. There is not easy "get out of here and forget about it". By using our Services or clicking I agree, you agree to our use of cookies. Sadly many of these "dirty loans" are effectively defaults, just taking ages to be declared as that. and enjoy unlimited access to the following: Charge pertained to US investigation into the marketing of the group’s opioid addiction drug, John Baron reminds readers of the importance of portfolio rebalancing and highlights some contrarian calls, • Tips and recommendations - to beat the market • Portfolio clinic & Mr Bearbull - build a well-planned portfolio • Expert tools - track and manage investments effortlessly• Plus free delivery to your home or office. In some cases, the wait is even longer.

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