Following on from my last review, another 12 months have gone by so here’s an update on my peer-to-peer (P2P) lending.
Around this time last year, my P2P portfolio stood at £2,098.15.
As at June 2016, it totalled £2,437.20.
£226.88 came from referrals and a bit of new investment (a whole £26.88!), so actual increase was £112.17 (5.3%).
This increase compares favourably to the 4.9% I achieved in 2015 as I continue to reinvest my money in loans with higher interest rates.
Here’s my P2P portfolio:
Funding Circle – £1,050.11
FundingKnight – £105.18
LandBay – £204.09
Lending Works – £355.55
RateSetter – £730.02
In December, I suffered my first P2P loan default. Since then, there has been a second default. The above 5.3% increase includes both defaults (both of which were with Funding Circle). Most of my loans are very small and spread out (I have over 80 loans with Funding Circle), thus hopefully, minimising the impact of defaults. Had I not had those defaults, I would have seen an increase of 6.4%.
P2P does have its risks. It’s not covered by the FSCS so there is the chance that you may not get all your money back should things go belly up.
In June, FundingKnight went into administration. The first I heard about it was when I received an email stating that it had been acquired by a company called GLI Finance. I don’t have much loaned via FundingKnight but some lenders may indeed be trying to get their money back in a panic. I can see on the website that there are lots of loans on the secondary market and not a lot of new loans (if any). What I’m going to do is to withdraw repayments made and recycle them into one of my other P2P accounts – I’m not going to try to cancel down my loans or sell them.
This does mean that I’ll not really be keeping to my P2P diversification plan, but my funds will still be spread between the other accounts.
So, whilst I’m not currently intending to add any new funds, I will continue to reinvest and of course, will monitor my portfolio closely.