Peer To Peer Lending As An Alternative For Long-Term For Investors
The rise of peer-to-peer lending has formed a new investment break for income-seeking investors who are willing to do extra homework.
Most financial media typically cover short-term opportunities which apply generally to stocks, although you will also hear about bonds that fluctuate as their prices vary each day.
While the Federal Reserve (USA) keeps short-term interest rates so low, market prices for bonds crash as interest rates rise. This can be painful for investors holding shares in bonds — there’s no assurance that you’ll make up those losses when, years from now, if rates fall again.
Peer-to-peer (P2P) is an alternative source of income for long-term investors who’re willing to take another step for better returns. Several P2P platforms across the UK are known for their fantastic offers and other features. While some do have competitive rates, their disadvantages also have greater impacts.
Saving Stream — With loans not exceeding 70% of the property value, and all lending is held with legal charges, they guarantee minimal risk and gives a better return on investment.
Funding Secure — They offer interest rates that range from 9% to 13% per annum, all backed by professionally-valued assets. But by buying on the secondary market and from high rates for property loans on the primary market, you can achieve 16.5%.
Collateral — Offers up to 12% interest per annum return on investment and allows investors to lend funds on assets and properties.
Property Moose — They source all properties below the current RICS value which gives the property the greatest possibility of attaining capital gains at the end of the term. They also give a daily cash bonus of 3% per annum from the time of investment until the property is acquired. Recently, they introduced a secondary market that allows reselling of property shares with just a 2% fee for the buyer.
Property Partner — This property crowdfunding platform lets you invest in residential properties from just £50, earn rental income, and even sell your investment. However, one major drawback is it makes it hard to get a realistic valuation of your properties although you can download a list of your investments with their ‘share valuations’ on the dashboard. But as many Southeast properties trade at 10% discounts or higher, this is not so beneficial.
Rebuilding Society — They offer an average gross return of 15.4% and gives bonus incentives to investors.
Bond Mason — Since April 2015, their investors have achieved a net return of 7.93%. The platform enables clients to purchase Receivable agreements based on payments relating to P2P credits and asset-backed investments. However, the platform is not regulated by the FCA nor covered by the FSCS so it’s even riskier to capitalise.
Lending Works — They are the only platform that has insurance against borrower defaults, fraud, and cybercrime. An investor’s capital may grow up to 4.8% per year with market leading protection including default risk insurance.
Assetz Capital — They take asset security on every loan to reduce the risk if borrowers were not able to repay their loans. One good thing about them is that they allow investors to lend directly to business owners (SME or property) without paying fees. They are also offering competitive finance for renewable energy projects including solar energy, wind turbines, and anaerobic digesters.
Of course we at Stratosphere peer to peer lending focus on the residential property sector for landlords and developers as an alternative short-term financing option and ensuring that our lenders have the correct security (first-charge cover of an asset) which our rates are very competitive indeed (please check out this website for more information).
Please note your capital may be at risk.