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.