P2P Lending

Until the other day, I didn’t know what peer to peer lending was.

Huw at Financially Free By Forty mentioned that he got income from it but it wasn’t until I spotted Maria’s informative post at Money Principle that I found out what it actually was and that it was something I could get into! 

My cash ISA is paying a paltry 1.5% interest – P2P lending offers returns of 3-6% (depending on how long you want to tie your money up for) and although there are risks involved in that it’s not covered by the FSCS (Financial Services Compensation Scheme) and you may not get all your money back, there’s some comfort that since last month, P2P lending is now authorised and regulated by the FCA (Financial Conduct Authority).

I read up some more about P2P lending, had a look at the various different platforms available and being on the cautious side, I’ve decided to start off small and go with two platforms – RateSetter and Lending Works.

With Ratesetter, I’ve loaned £1k for 3 years at 4.5%

With Lending Works, I’ll be loaning £1k for 3 years at 4.1%.

I’ve opted for the auto-lend facility for both to try to achieve maximum returns, ie as repayments are made on my loans, the cash is then re-lent to other borrowers.

I’m probably not comfortable putting more money in this type of ‘saving’ right now, but we’ll see.  I’ll update when there’s something to update.

So far, the £1k loan at Ratesetter has been taken up, so it’s all go!

Edit* – since I made this post, £600 of my Lending Works loan has been taken.
Edit** – All of the Lending Works loan now taken.

4 thoughts on “P2P Lending

  1. Hi Weenie,

    I discovered your blog through reading Huws financially free by forty blog.
    I love all you guys, some really great stories about saving and investing and all so friendly too.
    I will keep an eye on your progress with peer to peer lending, its something I've done a little research on but as yet I've not dived into for a few reasons, one being wanting to build a dividend growth portfolio first.
    I would like to ultimately have a diversified investment strategy and peer to peer is something on my radar so i will follow you with interest.
    Well done on being a LFC fan living in Manchester by the way,it cant be easy!! Mind you I live in Liverpool and support Tranmere Rovers!!
    Great blog by the way.

  2. Hi Jon
    Thanks for stopping by. Yes, I only discovered this great blogging community about finances recently and it was following Huw and others that persuaded me to start my own blog – there are a lot of really friendly and helpful people around to help us all improve ourselves financially.

    I have been a long suffering LFC fan but this year , oh so close but the banter with the United fans at work has been worth it!

    Nice to see a fellow northerner on here, most folks seem to be from down south!

    Hope to see you around more often!


  3. Hi Weenie,

    Thank you (and Jon) for your very kind mentions here! It puts a huge smile on my face to know I'm helping people even in a very small way. 🙂

    I'm also very interested to see how you get on here Weenie. Good on you for trying it out! You've put a substantial amount of money in to make a decent return, but an amount that you're comfortable with. I wish you all the very best with it!

    I'm doing P2P lending with Funding Circle, I heard some good feedback about both Ratesetter and Lending Works.

    Please keep us posted!


  4. Hi Huw
    Thanks – I'll update when there's something to update – too soon for anything just yet. Yes, I've invested a comfortable amount, will see how it goes before investing more, probably with another company to spread my risk. Funding Circle is one I will consider.

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