RateSetter.com £100 bonus Thread

[jayboat]

Hey, just thought i would let a few guys no that i found this deal on ratesetter that pays a £100 bonus after you deposit £1000 and use thier services for 1 year. They are a p2p lending service like zopa, funding circle ect. I did a little googling and its seems to be legit, lots of good reviews and such. I decided to try it around 2 weeks back and put £500 into a 1 year account @4% and the other £500 in a 5 year account that i can build on @6%. 

So based on that info, i will return 15% on my first year. Not bad at all and nothing stopping you just doing a 1 year account and move it somewhere else after. I have been looking at ratesetter a few months now and decided to go for it when i first saw the offer (im such a bonus whore)

Anyone have any feedback are comments about this crowd?

 

[HighlandTiger]

If I'm going to be putting my money into unsecured p2p loans, I'd be wanting a lot more than 4 or 5%. To get the 6% you need to leave your money with them for 5 years. If you want access to your money before that they will charge you a fee. 

I'm currently investing with saving stream, who deal with secured bridging loans of no more than 70% LTV, and I get 12% pa, (actually slightly more if you reinvest your monthly interest payments), Interest is accrued daily, and you have a secondary market which is so liquid, you can sell your loan parts within a couple of seconds, for no extra charge. 

I have one simple rule when investing with any p2p or crowdfunding company, there must be a secondary market to allow me to exit when ever I want.   

There is an excellent p2p forum at http://p2pindependentforum.com/ I have learnt a hell of a lot, just from lurking and reading threads. 

 

[HighlandTiger]

Also with ratesetter remember you have to reinvest your monthly money you receive from them as it includes both interest payments and part repayment of the capital. Otherwise you will be getting less and less interest each month. 

[sovereignsteve]

Haven't some of the p2p companies gone bust recently?

[HighlandTiger]

9 hours ago, sovereignsteve said:

Haven't some of the p2p companies gone bust recently?

Not the UK ones, Trustbuddy from Sweden went bust last year, mainly due to fraud from the company owners, and a Chinese one has just gone down the pan, but again that turned out to be a fraudulent ponzi scheme.

The UK ones seem to be on a much better footing, and all have FCA approval, (most currently on an interim basis as the FCA work through the new laws and the raft of new applications, but all will eventually need full approval if they wish to continue in business.) The government is looking to create a p2p / crowdfunding ISA, so it looks like this industry is starting to become more secure

That is not to say that a P2P company won't go bust, and a lot of them like Zopa and funding circle make losses every year they have been in business. But those ones seem to have a lot of money behind them from VC's, (venture capitalists). Some are very complicated in their business model, and some are extremely simple like Saving Stream. 12% pa, is not to be sniffed at. 

 

[jayboat]

Thanks for the reply and info Highland Tiger. 

Your simple rule seems to be a good one, an exit plan is always a good idea. Im just gonna leave that money in there for the year and get the bonus then move it somewhere else after. Not really worried about these guys going bust but you never no whats round the corner, i got done out of my bitcoin by Mtgox when they filed busto 7 weeks after i tried to withdraw my bitcoins to my wallet.

 I will add a little every month to the 5 year account (Kids will be after cars around that time) but need to read up a little more on the subject, im sure i'll get lots of good info from the forum link you posted. Im mainly a silver stacker but have decided that i need to spread it round a little so i am just dipping my toe.

 

[HighlandTiger]

In my opinion that forum is to P2P investing, as this forum is to PM stacking. Both have people with excellent unbiased knowledge, both have people with unwavering belief in their "investments" being better than everything else, and both have people who are happy to be led by the nose without doing any proper research.

Personally I'm glad I found both. Couldn't do without them.

ps. Have a good look at Saving Stream, (although don't forget I'm not a finance expert, in fact far from it, so take my words as a personal opinion). I'm intending to put £200 a month into this, selling my loans back on the market when they have three months left to run. If everything goes ok, after 10 years I will have turned that £200 a month into a £50k pot, which will earn me an income of over £6k a year for my retirement. (keeping all my fingers and toes crossed on that one)

[ArthGoch]

8 hours ago, HighlandTiger said:

. I'm intending to put £200 a month into this, selling my loans back on the market when they have three months left to run. If everything goes ok, after 10 years I will have turned that £200 a month into a £50k pot, which will earn me an income of over £6k a year for my retirement. (keeping all my fingers and toes crossed on that one)

From the monthly update that was sent out this week, ( and if they all pass their verification and due diligence ) upwards of 17 loans are due to hit the site this month, and with a potential of another half dozen or so ready for the 'Pipeline'. Also today three of the loans (43 44 and 45) were repaid in full. 

There is definitely an appetite from punters wishing to invest but the model is really going to be tested by the amount of quality loans Lendy can bring to the table. May be coincidence but the amount of 70% LTVs that are coming to the market seem to be burgeoning and thus the risk of a default and non recoup of outlay statistically would be greater.  

Nov-Jan period was very quiet and when loans were placed on the secondary market it was almost feral like in people picking these up..... ( how are for sale loans closed in literally fractions of seconds???)  

Yes, fingers crossed, if they can keep the amount of loans coming onto the market  at around a half dozen a month or so I think realistically your pot could be there or there about

 

 

[HighlandTiger]

2 hours ago, ArthGoch said:

Nov-Jan period was very quiet and when loans were placed on the secondary market it was almost feral like in people picking these up..... ( how are for sale loans closed in literally fractions of seconds???)  

That was due to "bot wars". Saving Stream soon took note of a poll I put up on the forum, where the majority of people wanted rid of the automated bots picking up loans in milliseconds. We now have a convoluted google captcha to navigate but at least its a bit fairer.

No way will 17 loans appear this month. there will be half a dozen at best. as for the 70% LTV, only half of the pipeline loans are for the full amount that Saving Stream will loan out. The rest are for lower amounts. As for defaults, I have no intention of holding any loans to term and intend to keep rolling the new loans into my account and getting rid of the older ones. 

 

[Pipers]

P2P as a whole makes sense, but when ever i dig down a little they seem a bit iffy to me. If I was a lender of lets say £5000 for a car,the borrower of the vehicle buys a car that deprecates £500 straight away. After 6 months the trade price of the car is now £1500 less at £3500 the borrower stops payments and goes missing the vehicle is recovered and sold for £3500 so with costs the P2P gets back £3150 plus the money the borrower has already paid, lets say £830 thats a loss of nearly £2000 by my calculations as the loan return would of been £6000 making a profit of £1000 over 3 years and the lender getting £600 the P2P getting £400.

 If this is wrong let me know

   @HighlandTiger

[SoulUK]

I don't understand how the asset price comes into it?

If the borrower sold the asset they would still be liable for the loan.

 

[HawkHybrid]

14 minutes ago, SoulUK said:

I don't understand how the asset price comes into it?

If the borrower sold the asset they would still be liable for the loan.

 

borrowers with lower value assets have a higher

risk of still owing money after they have sold

everything to pay off the debt. loan to value(ltv)

is used to gain some idea of this risk.

 

HH

[Pipers]

Thanks HH

Worst case, Yeah if we take it most people are in debt, the courts are not going to put a P2P debt near the top at the time of recovery. Its just a good job the vast majority of people in the UK are honest and hard working.  

@SoulUK Your view that the loan is a personal loan is true but recovery of any losses, in reality the debt is sold on at pennies in the £.  

[HawkHybrid]

my personal opinion is that currently, lending money carries a

higher risk than the numbers suggest. if sectors take a turn for

the worst, an asset that's worth £100k on the books may be

sold for 50k or less, when buyers realise that almost everyone

in that sector is struggling and many similar assets come onto

the market at the same time as businesses go bust. ltv of 70%

in this case means you lose 20% of the asset value or ~29%

of your investment. (not exactly matching the idea of a secured

loan people had in mind) being cautious is probably the way to

go.

 

invest only in what you know and understand.

 

HH

[HighlandTiger]

5 hours ago, Pipers said:

P2P as a whole makes sense, but when ever i dig down a little they seem a bit iffy to me. If I was a lender of lets say £5000 for a car,the borrower of the vehicle buys a car that deprecates £500 straight away. After 6 months the trade price of the car is now £1500 less at £3500 the borrower stops payments and goes missing the vehicle is recovered and sold for £3500 so with costs the P2P gets back £3150 plus the money the borrower has already paid, lets say £830 thats a loss of nearly £2000 by my calculations as the loan return would of been £6000 making a profit of £1000 over 3 years and the lender getting £600 the P2P getting £400.

 If this is wrong let me know

   @HighlandTiger

This is why I avoid like the plague loans secured on cars, art work, collectables etc. I will only loan on property with a LTV of a maximum of 70%. Whilst it still doesn't give you 100% safety, Most loans defaulted on property have not resulted in a loss for p2p lenders. The small personal loans though are a different matter, and losses on those are common and have to be factored in your calculations 

[HighlandTiger]

4 hours ago, HawkHybrid said:

if sectors take a turn for the worst, an asset that's worth £100k on the books may be sold for 50k or less, when buyers realise that almost everyone in that sector is struggling and many similar assets come onto the market at the same time as businesses go bust

If the housing market has fallen so much that a property valued a year ago (the average loan period that saving stream lend for) has dropped by a half, then I can assure you that we will be in such a financial mess as a nation, then EVERYTHING will be worth bugger all. 

 

4 hours ago, HawkHybrid said:

invest only in what you know and understand.

LOL, in that case, we'd all better get out of PM's cos no-one has a clue what is going to happen with them, even on a daily basis.  :)

[HawkHybrid]

how do you value a property as yet unsold? maybe the same

way as you would value stocks? ie last traded price? would

you say stocks are cheap, fairly priced or expensive right now.

you pays your money and takes your chances. I'm just saying

that the asset valuation figures are linked to the stock market

(you need someone with money to do the buying). and that I

would not bet on the stock market going steady, or up right now.

if your job is closely related to the property market then you

should have a fair idea of the risk involved. if not you could be

taking on more risk than you are comfortable with. investing

is about finding a risk to reward ratio suitable for yourself.

Quote

LOL, in that case, we'd all better get out of PM's cos no-one has a clue what is going to happen with them, even on a daily basis. 

that is being short sighted and has no correlation with a sufficient

understanding of pm's to make an educated investment.

investment in pm's are usually longer term strategic buys. not

day to day gambles on the spot price.

 

there is nothing wrong in 'invest only in what you know and

understand.'

 

HH

[Roy]

Thanks for this tip @jayboat!

Just received my £100 bonus today. A nice 16% return on a grand.

Will pull it all out tomorrow.

Cheers,

Roy 

[jayboat]

Your very welcome @Roy

Withdraws are very easy, im sure you have yours done by now  

I ended up with just over 14% for my grand. I rinsed and repeated in the wifes name mid Feb when they still had the offer on. I have around 256 days left. The interest is not as good this time round but should get 12-13% which is still good.