What happens when, not if, a provision fund is overwhelmed by bad debts? What makes these reserve funds so solid? Before we look at how some of the bad-debt provision funds will eventually be breached, let’s look at why they’re such tough nuts to crack. Because that just…
I really don’t like to bad-mouth competition because it makes us seem petty, but this is the Candid Opinion blog, and this latest information we have received from The Big Deal is eye-opening to 4thWay® readers. Before I criticise, them, I am absolutely convinced that…
Those of you who like to take a bit more risk might try P2P lending company Mintos. Key risks It’s riskier because it’s new, having started in September 2014. It’s also riskier because, well, it’s based in Latvia, so I don’t know much about how…
I put it to the wise community at P2P Independent Forum whether personal guarantees count as secured lending. Before I share their views, here are two unavoidable definitions: Personal guarantee Business borrowers sometimes give their “personal guarantees” that they will repay a business loan using the owners’ and directors’…
For most peer-to-peer lending companies, a late payment is not newsworthy. But it’s different for Wellesley & Co. (4thWay® Risk Rating 12/50, putting it just slightly above savings accounts on the risk scale.) This peer-to-peer lending company has been around since late 2013. Wellesley & Co….
The big news for lenders today is the big jump in interest rates that I noticed this morning. In other significant news, Funding Circle is also celebrating £500 million of loans matched between borrowers and lenders like you – including me. Let’s start with the rate…
Individual lenders need to beware that: The difference between the highest and lowest bidders is typically around 25%. In addition, the majority of lenders bid lower than average, meaning some bidders are getting to take a bigger part of each loan at higher interest rates….
There’s a whole world of ideas out there that we can learn from in our daily lives and that includes how we do P2P lending. A great place to start is to look into the biggest ideas in psychology, accounting, maths, physics, ecology and other disciplines….
I have recently been wondering whether some readers might be concerned by the increasing cosiness between banks and P2P lending companies? Since you’re not a very chatty lot – in terms of completing our article comments – I’m going to take your silence as a…
How do you rebalance your P2P loans and other investments when parts of your portfolio do better than others? For example, when your share investments perform very well and you want to split your wealth more evenly again between shares and P2P loans. Or when…
If lending fairly, with your borrower’s interests in mind, is important to you, RateSetter has just received an award that should boost your confidence in it. RateSetter is overflowing with awards like almost no other financial company. It’s clearly doing something right. But this new…
When my colleague “tweeted” (I still think of the word “tweet” in inverted commas. How square am I?) about one peer-to-peer lender helping itself through the new pension freedoms, it really rammed home how crazy these new pension rules are. In case you don’t know From…
P2P lending companies use many different ways to lower the risks of lending your money. I’m going to compare two of those ways today: secured lending and bad-debt provision funds. At 4thWay, we take great pains to avoid technical language or at least to explain it clearly…
More evidence that the top-grade loans at different P2P lending companies can be of very different quality. My thoughts on why you have to demand much higher interest rates from Bondora compared to Funding Circle. My colleague, Neil, recently gave an example showing that a…
I want to show you how different savings and investments did in the year just gone by. I’ve not cherry-picked this information to make peer-to-peer lending look good. I’ve looked for precisely the information that I want to know when doing a serious comparison of savings accounts…
It’s like when your say that a piece of art looks beautiful while the man at your side shakes his head in disgust. You’re both entitled to your opinions. Similarly, there are no regulations that define what an A+ loan is, or an A, or any other loan…
Sorry that we missed this somehow, especially since I’m a Lending Works member: its bad-debt provision fund has got better from 1 January. The worst bit is that I was sort of told this by someone working there in December. Anyway… Here’s the situation: Lending…
When P2P ISAs arrive, probably this year, we’ll be able to lend tax-free, but a surge in lenders could see interest rates plummet. Here’s how to handle it. What good are P2P ISAs? Currently, when you lend your money through P2P lending websites in return…
P2P lending provision funds set aside to reimburse lenders like you and me when loans go bad are of widely different sizes and some pay out sooner than others. How big is your provision fund? Sources: the P2P lending companies and 4thWay® As you can…
Everyone’s always trying to beat the FTSE. I’ve seen several articles in the past few weeks touting shares that will do just that in 2015. The mere existence of the FTSE benchmarks seems to inspire competition for competition’s sake. 4thWay has its own benchmark of P2P lending returns…
